Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Tariff Rebate Subsidy (Northern Isles)

[Relevant documents: First report from the Scottish Affairs Committee of Session 1995–96, on the removal of tariff rebate subsidy on Northern Isles freight (HC 229), and the Government's response thereto (Cm 3492) ]

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Lait.]

Mr. William McKelvey: Good morning, Madam Speaker. I am delighted to have this opportunity to debate tariff rebate subsidy. This is an historic event, as it is the first time that the Select Committee on Scottish Affairs, which was formed comparatively recently, has had time on the Floor of the House to discuss a report and the Government's response. By way of introduction, I shall outline the history of the tariff rebate subsidy scheme in the highlands and islands, so that people who enjoy reading the debate later on may understand what it is about.
The Highlands and Islands Shipping Services Act 1960 commits Governments to maintaining and improving sea transport services in the highlands and islands, by giving financial assistance to the operators. The Government introduced the tariff rebate subsidy for the carriage of freight to the Northern Isles in 1979.
The subsidy is intended to reduce the cost of supplying essential commodities to customers in remote highland and island locations and to promote exports. Its primary purpose, according to Highlands and Islands Enterprise, is to sustain the economy of the islands and to retain their populations, which I am sure that the whole House would agree to be a laudable and sensible objective.
Service users benefited directly by receiving freight accounts net of the tariff rebate subsidy, while shipping operators reclaimed the discounted figure from the Scottish Office. The scheme provided freight rate reductions of 10.5 per cent. on imports to Orkney and Shetland and 47.5 per cent. on exports.
In 1989, subsidy claims from P and O Scottish Ferries were limited to a fixed amount; in effect, a capping system was introduced. That system was then extended to cover the freight services operated by Orkney Line and Shetland Line from 1991 and Orcargo from 1993. On 1 May 1995, the Scottish Office withdrew the tariff rebate subsidy on freight, with two exceptions: fish meal and fish oil retained tariff rebate subsidy for three years, reducing from 30 per cent. on 1 May 1995 to zero from April 1998; and southbound livestock retained the subsidy, but at a reduced rate of 33 per cent.
The Government argued that tariff rebate subsidy was a flawed system, and initiated a review of the market, to identify better means of supporting the shipment of bulk freight in the future. At that time, the Select Committee on Scottish Affairs decided to investigate the matter. We all enjoyed the visits to Orkney and Shetland, which gave us a great opportunity to hear for ourselves the concerns of the local people about what was happening.
Some doubts were expressed about the Select Committee's ability to understand such an intricate subject, but at the end of the day I was happy to hear at least one person say that she was astonished by the scope of the questions that we asked and our obvious knowledge; I must therefore pay tribute to the people who fed us the questions.
The Government raised specific questions about the level of subsidy paid to the bulk shipping service operators in the Northern and Western Isles, which had increased in real terms from £800,000 to £2.7 million between 1981 and 1995. Tariff rebate subsidy increases with the level of carryings, which has caused the Government to view it as flawed. The Committee felt that they had missed the point. TRS was introduced to help retain population on the islands by improving economic competitiveness and hence the productivity of island communities. It is therefore obvious that, as economic activity increases, with, for example, increased exports, the subvention will also rise. That tariff rebate subsidy increases as economic activity increases might therefore be considered an acceptable outcome.
The difficulty arises when the tariff rebate subsidy begins to exceed the finite resources that the Government allocate for shipping subsidies, and the capping mechanism is employed. The Government concentrate their attention on the effect of capping on the providers of shipping services—the competitive effect—but it should be remembered that capping must also ultimately restrict economic activity on the islands, thus adversely affecting island communities—the opposite of the intention of TRS.
The Government have also suggested that TRS encourages excess capacity in the bulk freight market. The Select Committee considered the effect of the removal of TRS on Northern Isles freight, found no evidence for that, and reported accordingly to the House. Bulk shipping services are provided on a tramp—rather than a scheduled service—basis, as in the ferry sector. That means that bulk shipping capacity tends to arrive in the market only when demand warrants it.
For instance, the Hay and Company vessel was also employed on other coastal routes around the United Kingdom; it was not used solely for Northern Isles trade. The Government's suggestion that bulk operators were forced to run under-utilised vessels on Northern Isles routes and that such under-utilisation was subsidised by TRS was not borne out by the facts disclosed by our investigation. TRS applies to the freight rate in respect of cargo carried, not the vessel's space or the capacity that is provided. Therefore, TRS could hardly be said to create excess shipping capacity in the bulk freight market.
The concept that TRS is flawed ultimately depends on what the Government's objective is. Perhaps the Minister will enlighten us when he replies. If the objective is to restrict, or even withdraw, public expenditure in respect of shipping service subsidies, then, far from being flawed,


it could be argued that Government policy has altered and that they believe that support for bulk shipments is no longer necessary. That is a sensible point at which to turn to examples of how the public sector supports essential passenger and freight ferry services in other European Union countries. The Government may want to consider some of those methods.
The Spanish Government provide guaranteed funds for ship mortgages, corporate tax allowances for Spanish-registered ships, and exemption from transfer tax and stamp duty, and pay 50 per cent. of the social security contributions of shipping employees. Ferry services to the Canaries, the Azores, Madeira and the French Atlantic possessions are all maintained, in one way or another, with state support. Italy supports its state-owned ferry operator with contributions to vessel costs and a subsidy to cover trading losses. For private operators, the Sicilian regional government reimburses 50 per cent. of the cost of round-trips for tourist cars between Genoa and Sicily.
The tariff rebate subsidy is flawed only from a certain viewpoint. If it is there to help island communities to compete economically, to survive and to allow people to remain on the islands, it can hardly be said to be flawed, as it clearly fulfils that purpose by aiding the creation of island businesses that specialise in production or consumption of bulk commodities. It is another matter if it is considered flawed because it is an increasing burden on the taxpayer.
The Government have argued that TRS is flawed because it does not offer value for money to the taxpayer and cannot be sustained in the longer term. That statement suggests that the Government favour restricting, if not entirely removing, the subsidy. I shall wait to hear what the Minister has to say on that. I am glad that the Government have listened to the Select Committee and rejected entirely removing the subsidy. I welcome the Government's acceptance of the immediate reinstatement of TRS for the carriage of bulk freight to and from Orkney and Shetland and of putting TRS for the carriage of livestock back up from 33 to 50 per cent.
I am concerned about the four options identified by the Government as alternatives to TRS for bulk freight. The first two options both involve capping. Each would effectively place a limit on the public funds allocated for shipping subsidies. When a cap is introduced, demand for shipping capacity must fall, as must economic activity. The question is one of balance: the quantity of public funds against how much economic activity is needed and desired on the islands.
The Government's third option involves completely tendered contracts operating on a geographical basis. That probably means that one or two bulk shipping operators would serve the Northern Isles routes. Curiously, the Government suggest that that would address the problem of excess capacity, a problem that does not exist for bulk freight services in the Northern Isles. Such franchise agreements would be a subsidy to the transport provider, not to the shipper or consignee of goods.
That was a core issue in the Select Committee's report. We said that the emphasis of tariff rebate subsidy had changed and had become a subsidy for the transport provider. While the operator would be monitored, it is reasonable to suggest that conflict might arise if market

freight rates were subsequently increased to take account of a decline in demand or lack of adequate subsidy for a given period.
Bulk vessels seem to be regarded as homogeneous craft, but companies on Shetland need specialised tankers to transport fish oil. Such services would need to be considered in any franchise scheme and would increase the complexity of that option.
The fourth option would place the subsidy with the public authorities in the islands, to enable them to purchase their preferred service. It is not certain that all the islands councils would want to bear such a responsibility, although it was made clear to us that Orkney would favour it. Orkney islands council is bidding for the lifeline passenger service to Orkney.
Another issue of great concern is the Government's decision not to allow CalMac to tender for lifeline services. The main argument against that is the delay that would be caused in tendering. Our investigation has already caused some delay, but it was worth while, as I am sure the Government agreed when they received our report. A further delay would allow CalMac to tender, which could prove worth while. Even at that late stage, it would not be wise to rule it out. It has been argued that CalMac has an unfair competitive advantage, but the Committee thought that, as it has been found to be as efficient as the private sector by no fewer than three different consultants' reports, it could be more cost-effective to the taxpayer.

Mr. David Marshall: My hon. Friend mentioned the suggestion that CalMac might have an unfair competitive advantage. Could that not apply equally to P and O?

Mr. McKelvey: I was merely saying that the Government had suggested that there was an unfair advantage; I was not saying that. My hon. Friend is right, because the Select Committee strongly felt—I put it no higher—that there was a very cosy relationship between the Scottish Office and P and O. In effect, P and O has been subsidised at a time of loss, and I shall return to that matter in more detail later in my speech.
The competitive tendering process has more to do with dogma and a bias against publicly owned, yet—as in this case—successful operators than with any threat to competition. I am concerned also that the Scottish Office is saying that, as passenger ferries carry freight and livestock, those services do not need to be separately defined as "lifeline". Freight-only services are likely to be provided in line with demand without subsidy; and it was pointed out to the Select Committee that, if new craft were to be introduced on that route—as they no doubt will be in the future—they might not have freight capacity and might be simply for passengers and cars. That would leave the islanders in a precarious position—again, the reverse of what the subsidy was intended to preserve.

Mr. David Harris: I congratulate the hon. Gentleman and the Committee on this interesting report. Is he aware that the Isles of Scilly in my constituency have had no subsidy at all for the operating costs of ferries from the mainland to the islands, or from St. Mary's to the off islands? Does he think that that is right? Is he


aware of the considerable resentment of the Scilly islanders at the difference in treatment between the Scottish islands and the Isles of Scilly?

Mr. McKelvey: In all its travels, the Select Committee on Scottish Affairs never had the opportunity to visit the Isles of Scilly. I wish that we had thought of that, as we could have compared the two areas.

Mr. Robert Hughes: We slipped up there.

Mr. McKelvey: Only a certain amount of finance is allowed to Select Committees—as you well know, Madam Speaker—and we Scots are frugal when it comes to travel. However, the hon. Member for St. Ives (Mr. Harris) raises an interesting point and it is something worth looking at. I am not sure whether there is a need to maintain the population in the Isles of Scilly—as there is in the Northern Isles—but if so, there is scope for argument that a subsidy should be provided to improve the services to those islands.
Many matters have been raised, and many hon. Members are anxious to catch your eye, Madam Speaker. The members of the Select Committee who are in the Chamber are now specialists in the area. My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) referred to the perceived losses by P and O Scottish Ferries, because of competition, and the loss in market share for freight because of the new entrants to the TRS scheme. Between 1991 and 1992, P and OSF's financial performance deteriorated by some £4.4 million. During the same period, P and O's freight revenue fell by only £1.4 million.
Other factors in the loss of freight revenue were more significant, and I recall that the members of the Select Committee were surprised by them. Higher interest and depreciation charges in respect of replacement ships came to a total of £24 million. During 1991–92, P and O undertook the purchase and refit of two second-hand vessels—the St. Clair and the St. Ola. In the case of the St. Clair, the cost of £15 million was 50 per cent. more than all investment over the previous five years. The MDS Transmodal report suggested that P and 0 had incurred significantly higher finance charges over that period. Coincidentally, the current cost accounts of Caledonian MacBrayne show a loss of £4.4 million for 1991—almost all because of increased provision for depreciation.
The Select Committee saw the issue of vessel replacement as of central importance to the inquiry, and the report states:
We believe the dramatic deterioration in profitability experienced by P & OSF between 1991 and 1992 was less as a consequence of the fall in freight revenues than due to an increase in depreciation, interest and other charges related to increased capital expenditure on replacement ships.
I wish to refer to the recent tendering process for the contracts for supplying ferry and freight services. From the original 18 tenders—which did not include Caledonian MacBrayne—we are now down to three. There has been a change in the terms of the tendering for contracts, inasmuch as the three remaining firms will now be aware that—because of changes in European legislation—they would qualify for a 50 per cent. grant towards the purchase of a new vessel. That information was not

known to the other 15 tenderers, which have since dropped out. That in itself leads me to believe that the Government should reconsider the tendering process.

Dr. Norman A. Godman: On the acquisition of new purpose-built vessels—I refer to paragraph 81 of the Committee's fine report—I should point out that, with European funding, the contracts for the building of such vessels would have to be advertised throughout the EU. More important, however, Caledonian MacBrayne has vast experience of designing and running purpose-built vessels to transport goods and people between the islands and the mainland.

Mr. McKelvey: My hon. Friend raises a relevant and helpful point.
I am nearing the end of my speech. If I may, I shall refer to a recent cartoon that appeared in the papers in the Northern Isles and which summed up the situation as most islanders believe it to be. The cartoon depicts a sporting scene and a stadium with three runners about to take off in a hurdle race. In the outside lane, we see Orkney Ferries, which has limited routes and is involved in the tendering process. In another lane, we see Sea Containers, which has the route from Argyll to Northern Ireland. Both those runners are depicted as quite muscular. P and O, however, is drawn as slightly bent and balding—not unlike myself—and certainly middle-aged.
The runners are about to take off at the sound of the starting pistol. The hurdles for Orkney Ferries and Sea Containers are drawn as about 6 ft high, while the hurdle for P and O is about 2 ft high. That encapsulates the feeling in the Northern Isles—people feel that P and O is again being favoured by the Scottish Office and that there is a cosy atmosphere between the two. That very much concerns local people.
We are to have a general election, and my hon. Friends and I hope that it is sooner rather than later. The Government must take cognisance of that fact, and of the fact that most commentators say that there will be a change of Government. We shall have to wait and see. Because of questions about the availability of grant, the Government would be wise to suspend the tendering operation, with a view to reconsidering it after the general election. Perhaps Caledonian MacBrayne might then be given an opportunity to tender, if it so wishes.

Mr. Phil Gallie: The hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) said that this was something of an historic occasion, in that it was the first time that a report by the Select Committee on Scottish Affairs had been debated in the House. However, I believe that the Select Committee has created history since 1992. It was not constituted before 1992, and there was a gap. The hon. Gentleman is the Chairman of the Committee, and I commend him. The Committee has carried out many interesting investigations, and although I have not agreed with him on every occasion, he has always been fair and taken a positive view.

Mr. David Marshall: Is the hon. Gentleman aware that, between 1979 and 1987, the Select Committee on Scottish Affairs produced a number of good reports, and that one of the Chairmen was my hon. Friend the Member


for Aberdeen, North (Mr. Hughes), who is present today? Does he agree that the reason why there was no Select Committee on Scottish Affairs between 1987 and 1992 was the failure of the Conservative party to provide enough Members of Parliament who were willing to serve on the Committee? Labour Members were only too willing to serve, but the Conservatives prevented the Committee from meeting.

Mr. Gallie: I do not disagree with any of the hon. Gentleman's comments. Had I been a Member of Parliament before 1992, I should have wanted the Select Committee to be reconstituted, and I have worked pretty assiduously within the Committee since being elected. What happened before 1992 is another matter entirely.
I want to say to the hon. Member for Kilmarnock and Loudoun that recently we carried out an interesting investigation into community care, and I hope that today's debate has not slowed efforts to get that report published. I should like to think that I shall be here in the next Parliament to debate that issue on the Floor of the House, because it is vital to Scotland.
This debate arises from the abandonment in 1994 of the tariff rebate subsidy, albeit in conjunction with maintaining it at a reducing level for fish oil, fish meal and livestock. One pleasing aspect of the Committee's investigation is the fact that, as a direct consequence, my right hon. Friend the Secretary of State has uprated the TRS for livestock, principally in support of the Kirkwall-Invergordon route. The TRS has been uprated from 33 per cent. to 50 per cent.; I welcome that, and the Government's comments. The one thing that is not stated in the Government response is whether that is against a fixed time scale. I would suggest to my right hon. Friend or his successor, although I think that he will remain in his post after the general election, that that uprating should be continued.
The subsidy for Northern Isles services was turned around to the block grant for passenger services, to be competed for by service providers. As the hon. Member for Kilmarnock and Loudoun suggested, in the first instance, that certainly seemed to favour P and O Scottish Ferries and, to a degree, it allowed the company to set its own standards for that service. The results appear to be acceptable and they are welcome to Shetlanders, who receive a regular and extremely good service between the islands and Aberdeen, and there is no doubt that the service suits the commercial interests and tourism industry on Shetland.
However, concerns about the under-usage of capacity that was identified in the Committee's report are ignored. One difficulty that the Government must recognise is the difference of opinion between people on Shetland and people on Orkney. An easy answer might be for the Government to come up with additional cash to throw in different ways at the different islands, but I do not believe that that is a practical solution.
There are other issues in the report on which the Government have acted positively. They have addressed the issue of regulation of maximum freight tariffs within the passenger ferry service contract. However, in addition, we should consider the charges made in respect of cross-subsidy by P and OSF and examine the extent to

which minimum freight tariffs would be appropriate. I am advised that P and OSF levies a livestock charge on the Invergordon run of £5.15 per head of cattle, which compares with a charge of £17.38 in 1992. Given Orcargo's charges, the 1992 figure appears to be more appropriate.

Mr. James Wallace: rose—

Mr. Gallie: The hon. Gentleman wants to intervene, but it would be better to let me run.
A start point for contract conditions on block grant might be a maximum freight charge of £5.15 plus an allowance within the contract for an X-factor increase year by year of the inflation rate. That would alleviate fears of predatory pricing, which would drive competition out of the marketplace and leave P and OSF with the world as its oyster. The provision of such a service would be a major factor in the consideration of the contract. Increased TRS on livestock and provision for peak livestock capacity within the passenger contract would be welcomed all round.
I warmly welcome my right hon. Friend's decision to reinstate TRS on the carriage of bulk freight. From the minutes of proceedings in the report, it will be noted that my hon. Friend the Member for Eastwood (Mr. Stewart) and I urged that TRS should be amended or revamped, so that livestock and agricultural freight and industrial bulk and semi-bulk freight are covered. Given that the Government have addressed that matter, I am not in a position to complain about the Government's response to the report.
I want to quote a letter from Highlands and Islands Enterprise, which
has been monitoring the prices of a range of goods in Orkney and Shetland following the changes in the Tariff Rebate Subsidy".
It has determined that
there have been relatively few changes in prices of goods in Orkney and Shetland which can be linked to the Tariff Rebate Subsidy.
That is, to the removal of the TRS. That seems to justify to some extent the concentration of my hon. Friend the Member for Eastwood and myself on the bulk freight aspects of TRS. The letter also suggests that
there are considerable concerns among the Orkney and Shetland business community
about the renegotiation of the P and OSF contract and whether that might have an adverse effect. I am sure that my right hon. Friend the Secretary of State will take note of such concerns.
On the consequences of the reinstatement of the bulk freight TRS, Highlands and Islands Enterprise says:
This has reduced the price of sand imports from Aberdeen… and quarries on Shetland are in a position to resume exports of aggregates.
Members of the Committee felt strongly about that issue, and we all welcome those findings. We also welcome the fact that the Government have undertaken a bulk freight review, and I have no doubt that its findings will be welcomed.
Without resorting to a line-by-line analysis of the Select Committee's report and the Government's response, I emphasise that my concern is to ensure that maximum advantage is taken for the islanders and the taxpayer of any continuing Government subsidy. I noted the remarks


of my hon. Friend the Member for St. Ives (Mr. Harris) in respect of the Scilly Isles ferry service, which is not subsidised, and I listened to the response of the hon. Member for Kilmarnock and Loudoun, which referred to falling populations in the Northern Isles. Having been an observer on the Committee's visits to Orkney and Shetland, I believe that there is a reversal of that process there, with many of the immigrants to the Northern Isles coming from south of the border, although I doubt that few are from the Scilly Isles.
I do not believe that the matter of livestock and bulk freight can be catered for in any way other than through the TRS system, as currently established. I referred earlier to the time scales in the Government response. However, I have several questions to ask and points to make in respect of the contract for passenger services. I queried from the start the suitability of the present P and O vessels and the philosophy of adapting old vessels for that route. Members of the Committee emphasised that that was a factor. I should like a guarantee that any future contract will ensure availability of stand-by vessels on the route. The under-utilisation factors of the service identified by the Committee should be addressed.
I want to know why the availability of European regional development fund money has not become known to those who tendered, until this late stage of the tender process. I understand that 18 companies originally tendered. It is only fair, correct, and in the interests of the taxpayer and all concerned, that any of the companies that feel that they could resubmit a bid, given the availability of ERDF funding, be allowed to do so. I ask my right hon. and learned Friend the Minister to take account of the fact that that would be in everyone's interests.
I understand that P and O has the lease on the roll on/roll off facilities in Aberdeen harbour. Whoever is the successful bidder for the contract must have open access to that facility; it cannot be blocked by P and O. I well understand that there will be difficulties. There will be a need for regular, timed services, which could be disruptive to P and O if that facility were used, but that facility is much needed for the service that is provided, and the successful bidder must have access to it.
I find it difficult to understand how the question of cross-subsidy on general freight can be addressed in full. I suggest that, whatever the method used to determine passenger subsidies, a link be made to the level of freight charges currently made and the level of freight volumes currently carried, and a substantial amount of subsidy made if no freight cross-subsidy is to be considered.
The list goes on, but as the hon. Member for Greenock and Port Glasgow (Dr. Godman) keeps pointing to me and to the clock, I recognise that other hon. Members wish to speak in the debate. I look forward to hearing what they have to say and, above all, to hearing the response of my right hon. and learned Friend the Minister.

Mr. James Wallace: I pay tribute to the Select Committee on Scottish Affairs and its Chairman, the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey), for giving the House, the communities of Orkney and Shetland and those of Scotland as a whole, the benefits of the Committee's report. The Committee has many pressing needs to consider in addition to this one, so we were very grateful in the islands that its

members took time to visit the isles to take evidence and to prepare what has been a valuable contribution to the debate.
That debate has raged since October 1994, when the former Secretary of State, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), announced that the tariff rebate subsidy on freight to the Northern Isles would be abolished with effect from 1 May 1995. In the meantime, there was to be a negotiated level of subsidy to P and O Scottish Ferries for its passenger and car services.
That decision caused outrage among my constituents. The Secretary of State for Scotland got a taste—or perhaps an earful—of that when he visited Orkney in September 1996. Soon after his announcement, there was controversy about the content of the KPMG consultants' report on which that decision was apparently based. I shall not go over all the ground and ask for the report to be published or ask what was in it and what was kept secret.
The aspect that caused most anxiety among my constituents was the fact that those who were involved in the delivery of shipping services apart from P and O Scottish Ferries—Streamline Shipping and Orcargo— were barely consulted by the KPMG consultants. I believe that in both cases the conversations lasted about half an hour and in one case there was a follow-up telephone conversation, which shows how little the consultants had understood in the original conversation.
There was much dissatisfaction regarding the consultants' report on which the Secretary of State's decision was based, so it would be valuable—although it may be a little late in the day—to have the full study that the Select Committee undertook. This time, proper consultation took place with the various shipping lines, with the local authorities, with the local enterprise companies, with the National Farmers Union and with local businesses, which was welcomed and appreciated. It should have been done before.
In 1993, consultants prepared a report for the Scottish Office, with specific relevance to the Western Isles, evaluating the impact of ferry subsidies. I understand that the study concluded that any variation of subsidy level would lead to fare increases and result in loss of employment in all the main economic sectors in the islands. Notwithstanding that report, the following year the Government went ahead, without evaluating the likely effect on the Orkney and Shetland economy.
As a consequence of pressure and representations, the Minister agreed to monitor the position in the aftermath of the removal of the tariff rebate subsidy. A report that reflects much of that monitoring and contains an analysis of what has been going on has been prepared by EKOS—a firm of consultants—and is almost ready for publication. Any advance information that the Minister can give the House today of its contents would be welcome.
The hon. Member for Kilmarnock and Loudoun emphasised the importance of the subsidy in helping businesses. Partly as a result of the oil industry, my constituents have enjoyed unemployment rates below the Scottish average for several years. Many businesses have been built up, not least around the route between Kirkwall and Invergordon—a subject to which I shall return.
However, if one of the objects of the TRS system and of the fact that the Government and the House approved undertakings that admitted Streamline—


Orkney line and Shetland line—and Orcargo to the scheme was to promote competition and allow businesses to develop and benefit from the lower freight charges that resulted from subsidy, to a considerable extent it was a success. We are now in danger of losing some of the benefits that we have enjoyed in recent times.
Although existing companies may be able to monitor how they might be affected by the change in freight rates, we can never know how many potential firms have not invested there. One of the key factors in any business investment in the isles is transport and its costs, and one cannot tell how many people have been driven away by transport costs.
The Select Committee rightly said in its first recommendation
that the sea transport needs of Orkney and Shetland differ significantly and that each island group requires specific sea transport services which meet their particular needs.
I hope that the Government will bear that in mind when considering the current passenger service.
There is obvious concern about increased costs. My information is that, during recent months, P and O has increased its published tariffs by 3 per cent., Streamline has done so by 6 per cent. and Orcargo has done so by 18 per cent. I emphasise that those are only the published tariffs.
The Government have said throughout that they are prepared to impose a ceiling on the amount by which freight rates increase. That would appear to be a ceiling based on published tariffs, whereas the last thing that most people who use the service ever pay is the published tariff. Such has been the competition that, in most cases, there are discounts, and any potential bidder must find out the discounted rates. However, it would be reassuring if the Government were to say today that, when they talk about imposing a ceiling on freight charge increases, they mean a ceiling on what the charges have been in practice—the discounted charges, not published rates.
Concern about the re-emergence of a monopoly flows from that point. In its evidence to the Select Committee, Shetland Islands council, in a conclusion, phrased it very well, when it said:
The present level of freight tariffs on P&O services are the result of serious competitive pressure in recent years. The unanswered question is whether the creation of a monopolistic operator will be beneficial in the longer term when the memory of competition recedes.
Competition has managed to reduce prices. In its evidence to the Select Committee, the National Farmers Union for Scotland said:
Previously, as a monopoly P&O had imposed high tariffs and had been unreceptive to customer requirements.
There is the important question of maintaining equality in the service, and the re-emergence of a monopoly gives rise to concern. The hon. Member for Ayr (Mr. Gallie) pointed to what might be described as signs of predatory pricing. He referred to the P and O service between Kirkwall and Invergordon, but in fact he meant between Stromness and Scrabster, outward bound. That is an important point, because he almost undermined his argument. The hon. Gentleman cited the much lower prices for cattle now than in 1992.
When I responded to the passenger franchise specification in the new year, I suggested to the Minister that there may be an argument for introducing floor prices to combat predatory pricing. While the Minister was sympathetic to my argument, he responded:
However after some consideration we decided that this is not a practical option. Pricing floors are difficult to monitor and enforce given the many ways of discounting prices and would no doubt be perceived by the ferry operator as an unacceptable restriction on commercial discretion".
Nevertheless, I hope that the Minister will be alive to the possibility of predatory pricing and will explain how he intends to monitor it. I understand that the Office of Fair Trading is examining the matter, and perhaps the Minister could tell us the stage that the investigation has reached. One of the problems is the definition of "predatory pricing". However, if a problem is perceived in that area—evidence to the Select Committee highlighted such concerns—we should know how the Government intend to address it.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): I welcome the involvement of the Office of Fair Trading in the matter. We understand that, if there were evidence of predatory pricing, it would take strong action.

Mr. Wallace: I am somewhat reassured by the Minister's response, but the problem will be resolved only by experience over time.
The loss of routes is also important, particularly the loss of the Kirkwall-Invergordon route. In paragraph 73 of its recommendations, the Select Committee said that it should
be designated a lifeline freight and livestock route.
The operation of that route could not be described as opportunistic or as cherry-picking, but that is how the Government refer to it in their response to the Select Committee report when they accuse some operators of opportunism. The route did not exist previously and was built up by Orcargo. It is much favoured by Orkney farmers, and particularly by the auction mart as cattle may be transported from Orkney and down the A9. The scheduled service fits in well with the auction mart's arrangements. There is concern about the route's future unless it receives some recognition as a lifeline livestock route.
I have argued previously that the route should be franchised in its own right. I regret that that argument has not prevailed to date, but it is worth maintaining. The Minister may say that the TRS has been gone for almost two years, and that the Government responded to some extent by restoring the subsidy on livestock and by increasing it slightly—it went from 47.5 per cent. to 30 per cent. and then back to 50 per cent. The Government may say, "Orcargo is still there, and you have been proved wrong." However, we could turn that argument on its head, as the Government's case is based on access capacity, which is the same two years later. I know that Orcargo is finding things difficult. Preserving the route does not necessarily mean preserving a particular company. That route has proved to be of considerable importance, and I hope that it can be franchised and saved.
The mixture of passengers and livestock has been addressed. In a recent letter to me, the Minister said that he had not heard about that issue before. However,


I was present at a meeting in September 1995 when the convener of Orkney Islands council told the Secretary of State about his concerns. At present, there is a smaller mix of livestock and passengers on the P and O sailings between Scrabster and Stromness, because most of the livestock travels on the Invergordon route. There is concern that a switch back to livestock on that route would impact on tourism.
Shetland is worried about the movement of large volumes of livestock at peak times. I am grateful that the Government have acknowledged that point, and confirmed that any specification would require the operators to ensure that there was sufficient capacity to move livestock at peak times.
One of the continuing concerns in Shetland is the configuration of services. I share the Government's view, which was expressed in the passenger franchise specification and in their response to the Select Committee, that two vessels are almost certainly needed to serve Shetland if we are to secure daily sailings. However, I am unhappy at the suggestion that only daily sailings five days a week will be required during the winter months. The salmon and fish processing industries would prefer to have daily sailings six days a week in order to ensure that produce gets to market in a good state.
I hope that the Minister will answer several important questions. Is there an element of cross-subsidy? He has told me that the lifeline freight service might be covered by the fact that the Government are supporting a lifeline passenger service. It has been admitted that there will inevitably be a bias to the existing operators in the tendering process. I endorse the call for a delay and a suspension of the tendering process to allow CalMac to participate. At what stage was European development funding made available to potential bidders? When were they told about it?
The exercise began when P and O announced that it could not provide new vessels. The Minister has told me that there must be new vessels by 2002 in order to meet the Stockholm agreement on shipping safety. What do the Government have in mind in that regard? Why is the question of new build not focused more clearly in the draft specification?
As the bidding process proceeds, will the Minister confirm whether he will involve the islands councils in the final decision making? Several aspects of the specification are not hard and fast: qualitative decisions must be made about a marketing plan, timetabling, cleanliness, customer satisfaction and consultation. With the best will in the world, I do not believe that civil servants or Ministers in the Scottish Office can make those qualitative decisions. Those issues intimately affect the life style and the ways of the islands.
Therefore, I ask that the Government involve the islands councils in evaluating the bids where qualitative issues are at stake. They should also be involved in the monitoring process. The Scottish Office will rely on those councils, the NFU and other operators to assess how well the franchisee is performing.
The services are vital to my constituency. We suffer the disadvantages of geography. but they can be mitigated. Business development depends on the availability of transport at affordable prices. We want to secure a safe, efficient and cost-effective system of

transport for freight and livestock as well as for passengers and cars. We do not want to see the re-emergence of a monopoly. I do not believe that the Government have yet responded adequately to the Select Committee report, but we live in hope.

Mr. Andrew Welsh: I shall be brief, as I know that many hon. Members wish to participate in the debate. There is a feeling that the Government have not fully met the specific and important conclusions of the Scottish Affairs Committee, which were designed to be fair and to provide a long-term solution to the problems faced by the people of Orkney and Shetland. I have some specific questions for the Minister, which I hope that he will answer today.
Do the Government acknowledge that freight is an essential element of the lifeline service? If not, why not? We need an explanation. Is there under-utilisation of the existing P and O ferry fleet, with the consequence that public subsidy is being used to support excess capacity? The Secretary of State has declared that he is not able to deliver what people have asked for because it does not represent what he calls the "best value" for the taxpayer. Will he therefore confirm that the number of vessels operating the services will be reduced in order to prevent a mis-spending of public subsidy? I would like him to be more open about the Government's intentions so that the people may make a judgment about the fate that awaits them under Government policy.
The Committee expressed concern that the current interim subsidy arrangement appears to provide no incentive for the lifeline ferry operator to achieve potential operating efficiencies. That concern has not been addressed, and the Minister has a duty so to do.
The Committee highlighted the fact that the changes have given P and O Scottish Ferries an unfair competitive advantage. The Minister stated in evidence that the expected earnings from freight carrying were based on what he called "reasonable market rates", but the managing director of P and O stated in evidence that "net freight revenue"—that is, after the deduction of subsidy—was used in the P and O financial model submitted to the Scottish Office. It has been pointed out to me that the market rate should have been construed as the gross freight rate—that is, with the subsidy included—as that was the actual revenue earned by the operators before the changes.
The impact of that anomaly was compounded by the fact that P and O Scottish Ferries gave a guarantee as part of the interim arrangement with the Scottish Office that customers would pay the same net rate. That effectively undercut market rates by the amount of subsidy previously applied. Can the Minister justify P and O's position, or is the accusation of unfair competitive advantage true? I look forward to his detailed response.
Does the franchise specification favour older, depreciated ships, and hence act against newer vessels—

Mr. Robert Hughes: And crews' wages.

Mr. Welsh: —and crews' wages, as my hon. Friend says—as newer vessels would be less well placed to submit a lower bid?
I have been brief and specific. There is a clearly expressed concern on Orkney and Shetland about the possibility of the creation of a monopoly service. The view from Edinburgh may be different, but the issue affects everyone on the islands and their entire economic and social life. I ask the Government to address the questions specifically and to give the assurances being sought on a matter that is crucial to the future of every man, woman and child on Orkney and Shetland.

Mr. Calum Macdonald: I know that there are still hon. Members who served on the Select Committee who want to speak in the debate, so I shall restrict myself to one point, which concerns the recommendation in paragraph 55 that Caledonian MacBrayne be allowed to tender for the Northern Isles service.
In the Government's response on page 6, they say that one of the reasons why they rejected that recommendation was:
CalMac's core business activities are the operation of ferry services in the Western Isles and the Government believe it would be detrimental to the efficiency of operations on the West Coast of Scotland to extend CalMac's responsibilities to the Northern Isles.
That is not the view of the people in the Western Isles or of the communities that are served by the ferries. We believe that CalMac should be allowed to tender for the Northern Isles routes. We believe that that would consolidate and enhance the services and the provision of CalMac. I hope that the Minister will not use that rationalisation in his reply to the debate.

Mrs. Helen Liddell: I shall be brief, as several of my hon. Friends have posed serious questions to the Minister and we want to give him the utmost opportunity to respond.
I, like my hon. Friends, congratulate my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) not just on his contribution to the debate and on securing it, but on the excellent way in which he has chaired the Scottish Affairs Committee. Before becoming a Member of Parliament, I watched the Committee's work closely, and I am well aware of the depth of knowledge and expertise that is applied to many significant issues that affect Scotland.
Through detailed examination of the issues raised in the debate, my hon. Friend the Member for Kilmarnock and Loudoun has done us a great service by bringing down to more simple terms an extremely complex but interesting subject that is of considerable import to the people of the Northern Isles.
The important point that my hon. Friend made relates to the reasoning behind the Government's decisions involving ferry services to the Northern Isles. I reiterate his concern about the value judgments that are being applied by the Government in their responses to the Select Committee report. He drew attention to a considerable misgiving that has been articulated to me by people from the Northern Isles, and a point that has been raised by a number of hon. Members today: the close relationship that seems to exist between the Scottish Office and P and 0 Scottish Ferries.
The fact that people from the Northern Isles raise the matter is an important aspect to be taken into account. The people of the Northern Isles require reassurances that their best interests are at the front of Government policy, not some other arrangement that the Government have yet to explain to us.
The decision, taken by the former Secretary of State for Scotland, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), to change the basis of tariff subsidy to the Northern Isles is still questioned. The hon. Member for Orkney and Shetland (Mr. Wallace) drew attention to the consultants' report, over which there is a great question mark. Many of us want more detailed information about the way in which the right hon. Gentleman came to his conclusions on the future of tariff subsidy to the Northern Isles.
I share some common feeling with my hon. Friend the Member for Kilmarnock and Loudoun about whether the decisions in relation to P and O and the services that it provides to the Northern Isles have some dogmatic origin, rather than being directed to the best interests of the public in the Northern Isles.
My hon. Friend made a detailed point about the decline in the financial performance of P and O over 1991–92. The same point was made by the hon. Member for Angus, East (Mr. Welsh) when he drew attention to the depreciation of second-hand ferries and where they appear in the accounts of P and O.
Is it not ironic that I, on the Opposition Benches, am challenging the Government about their creation of an artificial monopoly for P and O, and advocating the free market and competition? Adam Smith must be turning in his grave at the Government's decisions that have led to this cosy relationship with P and O—and to £7.6 million being given to the company. It has been allowed to operate with an artificial monopoly.
In his closing remarks, my hon. Friend the Member for Kilmarnock and Loudoun made a plea for a sensible examination of the situation in the run-up to the general election. That is a reasoned request, and I do not wish to make any partisan point. A general election is looming. There are significant issues to be addressed. The Minister is a sensible man and takes his responsibilities seriously. I urge him to delay decisions on the tendering process to allow the Government elected in the next few weeks—whatever the colour of that Government—to re-examine the issues.
The points made in the Select Committee report about the involvement of Caledonian MacBrayne are very serious. I find it bizarre, to say the least, that a publicly owned company has been excluded from the tendering process for Northern Isles ferries. I find it questionable that we discovered the European regional development fund elements only after 15 of the companies that had entered the tendering process had withdrawn.
The cynicism of the people of the Northern Isles and the rest of Scotland must be addressed. The best way to do that would be to take the issue out of the fevered run-up to the general election and allow a more reasoned re-evaluation. That would provide an opportunity to re-evaluate the Kirkwall-Invergordon ferry as well. We must seek a resolution to the difficulties that have arisen in the case of the Northern Isles that takes into account the most economically efficient, as well as the most socially reasonable, option.
If the general election results in a change of Government, a Labour Government will seek to reopen the tendering process to allow CalMac to tender, and will seek to re-evaluate the issue of ferry services to the Northern Isles. We will try to find a solution that suits the Exchequer, and takes into account the concerns of people in the Northern Isles.
Let me make a more general point. I am worried about the apparent vendetta against CalMac. My hon. Friend the Member for Western Isles (Mr. Macdonald), who is probably more able than anyone else to analyse CalMac's performance because it provides a vital lifeline to the Western Isles, has referred to the importance attached by people there to CalMac's being given an opportunity to secure the contract for the Northern Isles. We have heard from my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) about CalMac's expertise in operating custom-built ferries, and we know of its commitment to securing continuity of service to remote Scottish communities. It is bizarre that it should have been excluded from the tendering process.
I regret having to say this, but, when we look at what happened in relation to the Northern Ireland contract, we must ask what on earth was going on when CalMac was excluded. What makes the situation even worse is the fact that, having been excluded, CalMac was forced to sell one of its vessels at a knockdown price to Sea Containers, which won the contract. That alone is cause for re-evaluation of the issues.
In view of what KPMG has said about the Northern Isles service, there may well be a case for a monopoly to continue. I leave the judgment open, but, if there is such a case, is there not a pressing public responsibility to ensure that a public sector operator operates with the taxpayer's best interests in mind, rather than the profitability of an individual company? Reading the Government's responses to the issues that have been raised, I was surprised to note that P and O's financial performance figured so strongly. I wish that, just occasionally, the Government would take into account the requirement to ensure that CalMac, a well respected ferry operator, is given a level playing field in which to compete.
The issues involved are extremely serious. We are talking not just about the future viability of services to the Northern Isles, but about the economic viability of the Northern Isles. I listened carefully to the reasoned arguments of my hon. Friend the Member for Kilmarnock and Loudoun and, in particular, the hon. Member for Orkney and Shetland who, in his final remarks, made a number of important points about the role of the islands councils, their inclusion in the assessment of the qualitative aspects of tenders and the role that they should play in monitoring the operation of the service. The councillors are the elected representatives of the people of Orkney and Shetland, and their concerns should be taken into account.
The hon. Member for Ayr (Mr. Gallie) asked some pertinent and serious questions, which I hope the Government will answer. For instance, he questioned the suitability of the secondhand vessels that P and O has used, and spoke of the impact that that has had on P and O's accounts in terms of the depreciation of those vessels. He asked for guarantees that standby vessels would be

available: such provision is important in remote communities. He also asked what the Government would do to deal with under-utilisation.
One of the hon. Gentleman's most important questions about the tendering process was, "Why was the issue of the European regional development fund raised so late in the day?" He also raised an issue that has caused me considerable anxiety since it was brought to my attention yesterday—access to ro-ro facilities for P and O at Aberdeen harbour. I am also a bit concerned about the fact that the Government have sought to appoint P and O's chief executive to Aberdeen harbour board. We must be assured of transparency in all decisions relating to the Northern Isles.
I think that my comments have been very restrained. I have not, for example, drawn attention to the fact that, since 1991, the Conservative party has benefited to the tune of £100,000 a year from P and O, because I feel that that would have made the debate partisan. It is, however, crucial in the run-up to the general election for us to stand back from the issues, and to give the new Government—whatever their persuasion—an opportunity to take account of the concerns of the people of the Northern Isles about monopolies, the concerns raised by hon. Members about the tendering process and the concerns about ensuring continued economic viability for the remote communities of the Northern Isles.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): This has been a very good debate, in which a number of important issues have been raised. I pay tribute to the Chairman and members of the Select Committee for their perseverance and application in inquiring into these complex matters.
We share the Committee's view that efficient and affordable sea transport services are vital to the movement of essential imports and economically important exports for the islands communities. As evidence of our commitment to support essential shipping services to the islands, we shall this year provide subsidies of £7.6 million for P and O Scottish Ferries for passenger services, £700,000 for P and O and Orcargo for livestock exports and £300,000 for bulk shipping operators. That is in addition to grant assistance for pier and harbour works at Scrabster, Stromness and elsewhere in Orkney and Shetland. The Government have paid Orkney and Shetland some £11 million in piers and harbours grant in the past five years.
Our policy is to allow the private sector, wherever appropriate, to deliver the necessary services, but I have been asked why CalMac is not being allowed to tender. CalMac is wholly owned by the Secretary of State, and the undertaking with the Secretary of State is to provide an approved lifeline ferry service on the west coast. There is no undertaking to provide services to the Northern Isles. We examined the matter carefully, and it was decided that, on balance, it would not be appropriate to allow CalMac to tender.
A number of factors influenced that decision. First, CalMac's core business is the provision of lifeline services on the west coast; secondly, we believe that the role of the public sector in the economy should be restricted and that, wherever possible, services should be provided by the private sector. Furthermore, the
Government wanted the tendering process to be seen as entirely fair. If CalMac had been allowed to tender on the back of Government funds, that would have been unfair to private sector competitors.

Mrs. Liddell: Why is public sector operation not considered advantageous? Private sector operators have considerable expertise in operating lifeline services in the Western Isles. Is there not an impeccable logic in transplanting that expertise from the Western to the Northern Isles? Are the Government not taking part in a narrow sectarian vendetta against CalMac?

Lord James Douglas-Hamilton: Certainly not. CalMac has an extremely good record, but, if a public sector organisation subsidised by the state were allowed to compete against the private sector, private sector tenderers would be deterred from coming forward. That could be seen to make for unfair competition.
The hon. Member for Orkney and Shetland (Mr. Wallace) asked whether the councils would be consulted. I give him an undertaking that that will certainly happen. The hon. Gentleman went further, however, and asked for the councils to be involved in the decision on the tender. While there have been extensive consultations on the specification, the final decision on the award must be for Ministers. After all, given that one of the bidders is Orkney islands council's own shipping company, involving the council in that decision would be hard to justify, and would lead to a conflict of interest.

Mr. Wallace: I agree with that, but surely the Minister recognises that the franchise specification leaves a number of matters open. The bidders must come back with proposals of a qualitative nature. Is the Minister saying that, once the bids are in, there will be further consultation with the islands councils on aspects of the final bids submitted, which will be of a qualitative nature?

Lord James Douglas-Hamilton: I am only too happy that there should be consultation on the terms of the specification, but the decision has to be for Ministers of the Government of the day.
The hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) asked whether passenger vessels will carry freight in future. I can assure him that the service specification requires the operator to provide capacity for the carriage of passengers, cars, commercial vehicles, freight and livestock.
The hon. Gentleman also asked about the European regional development fund. It has always been possible since the beginning of the tendering process for ERDF money to be made available for vessel replacement. That is not a new issue. The Government's response makes that clear.
Some hon. Members, including the hon. Member for Monklands, East (Mrs. Liddell), asked whether I could delay the tendering process. It would not be sensible for the Scottish Office to halt it at this late stage. To do so would cause further uncertainty before lifeline services could be secured by block grant contract. There could also be a danger that tenderers would withdraw. We believe that final bids are due this week, so we do not believe that

that would be in the public interest. Of course, if a general election is declared, the normal rules will apply to decisions made during the election period.
My hon. Friend the Member for Ayr (Mr. Gallie) asked a very relevant question about standby vessels. The final service specification requires tenderers to make proposals for continuing service during refits and repairs. These will be examined very carefully during the evaluation of bids, and we will be keen to ensure that proper arrangements are put in place in respect of breakdowns and relief vessels, and, indeed, cover for annual overhauls.
My hon. Friend also asked about new vessels. It is probable that the requirements of the Stockholm agreement on passenger ferry service safety survivability will make it inevitable that new vessels are introduced in 2002. New build options are being considered as part of the competitive tendering process.

Mr. Gallie: Will my right hon. and learned Friend give way?

Lord James Douglas-Hamilton: Very quickly, as I have a lot of points to answer.

Mr. Gallie: My right hon. and learned Friend emphasised the involvement of the private sector and the importance of competition—which I welcome—which was demonstrated by the 18 bids that came in. However, if factors have changed, it would not be unreasonable to give any of those bidders a further opportunity to be involved, particularly in relation to the comments on ERDF. Will he give further consideration to that point?

Lord James Douglas-Hamilton: If my hon. Friend is asking for special pleading on behalf of any of those who have not made the shortlist, I cannot do that; he is asking that the whole process be started again. I cannot give that commitment at this stage, and one reason why I cannot is because I am totally opposed to cross-subsidy—a point echoed by the hon. Member for Monklands, East. In determining the subsidy to be paid to P and O Scottish Ferries under the interim arrangements, we have attempted, as far as possible, to ensure that cross-subsidy will not occur.
In negotiating the subsidy, explicit account was taken of P and O's expected earnings from freight carryings on the basis of reasonable market rates. The Scottish Office's objective was to achieve a transparent contract designed to provide the minimum subsidy in the interim period to secure P and O's continued operation of the passenger ferry service. By minimising subsidy in that way, we have sought to avoid any cross subsidisation of freight services. For the longer term, I believe that competitive tendering of the block grant contract will be a strong safeguard against cross-subsidy, to which we are wholeheartedly opposed.
The hon. Member for Kilmarnock and Loudoun raised the issue of bulk freight subsidy support. The key point is that we have restored the rate of bulk freight support, but recognise that there are flaws in the system and in the way in which the scheme operates. That is why we have sought views from all interested parties on various options to amend the scheme so that it meets the needs of bulk product producers and users in the islands as efficiently as possible. The deadline for responses is 19 April.
The hon. Member for Orkney and Shetland asked about the ceiling on published tariffs. We will set a ceiling in relation to current market rates. He also asked about EKOS. One of the commitments that we gave the Select Committee was to continue to monitor freight prices and the market generally. To fulfil that, with Highlands and Islands Enterprise and with Orkney Enterprise we commissioned EKOS to undertake a study to evaluate the trends in freight process and to assess the impact of transport costs to the Orkney economy. That work is under way, and EKOS is due to report shortly.
Many of the Select Committee's recommendations have been acted upon. Its report carried great influence with the Government. We have decided, first, to consult Orkney and Shetland council and other passenger interests on the service specification; secondly, to regulate maximum freight tariffs; thirdly, to provide sufficient capacity for the carriage of livestock; fourthly, to increase the rate of tariff rebate subsidy for the carriage of livestock, from 33 per cent. to 50 per cent.; fifthly, immediately to reinstate TRS for the carriage of Northern Isles bulk freight; sixthly, to consult towards identifying more suitable long-term subsidy arrangements to support bulk freight; and, seventhly, to commission, with Highlands and Islands Enterprise, the study with EKOS.
We have not been able to accept all the recommendations.I was asked, for example, about the Kirkwall-Invergordon route. I accept that Orcadians perceive there to be distinct benefits associated with that route for the carriage of freight and livestock, but subsidising that route would perpetuate the problems of excess capacity in the freight market. It would encourage the continuation of excessive price competition in the freight market, threaten the commercial viability of the passenger freight operator and make it much more difficult to conclude the new block grant tendering process. We have therefore concluded that it would not be appropriate to subsidise the route at the expense of the taxpayer and to the detriment of the competitive tendering process for the passenger ferry contract.
Considerable concern was expressed that a weakening of competition in the freight market could lead to the emergence of a monopoly. There is no evidence at present—two years after the withdrawal of TRS—that competition for general freight has weakened. We intend to provide the contract with a regulation on maximum freight tariffs. We believe that that would be a significant safeguard against the abuse of monopoly power.
I recognise the desire of the hon. Member for Orkney and Shetland to ensure that there is adequate consultation. We will certainly ensure that that happens. We regard that as extremely important.
I should make it clear that the Government took the view in 1995 that continuing competition in the freight market, as well as customer resistance to price rises, would act as effective restraints on any significant increase in freight tariffs. We have promised to review the position on freight subsidies if evidence emerges to show that, over a period, prices charged in the freight market as a whole have risen substantially. That is why we commissioned the report.
I should also make it clear that our overriding objective remains to secure the long-term commercial viability of lifeline ferry services to Orkney and Shetland, which are central to the continuing social and economic development of the islands. Final tenders from the ferry operators bidding for the ferry services contract have been invited by 14 March. It is intended to reach agreement in principle on the contract terms with the preferred operator towards the end of April. Normal procedures and rules governing election periods will be followed.

Mr. McKelvey: Will the Minister give an answer to the problem that could arise from the appointment of the P and O Ferries managing director to the Aberdeen harbour board for three years, as many people would imagine that that implies that the tender has already been won?

Lord James Douglas-Hamilton: I am very sympathetic to the point made by the hon. Gentleman and by my hon. Friend the Member for Ayr, that whoever wins the tender—I have no idea who it will be—should have the necessary access. It is for the Scottish Office Minister at the time to use his or her good offices to ensure that that is implemented. I wish to ensure that the services are carried out effectively in that connection.
I think that I have answered most of the points raised by hon. Members. The new vessels issue is very important. I have made it clear that the Stockholm agreement requires the new vessels to be on the route by early next century. We are working on an agreement to give operators sufficient reassurance to allow them to invest in new build. The quality objectives laid down in the service specification were tightened after consultation with islands representatives.
We shall continue to monitor the effect of the present subsidy arrangements, in consultation with representatives of the islands' interests, to ensure that essential shipping services continue to be provided to the islands at affordable cost.
I thank hon. Members, and I would like to say how much I enjoyed being a member of the Select Committee that visited Shetland during the Falklands war when we were considering transport.

Dairy Industry

[Relevant documents: First report from the Agriculture Committee of Session 1995–96, on the UK dairy industry and the CAP dairy regime (HC 40), and the Government's response thereto (HC 708 of Session 1995–96).]

11 am

Sir Jerry Wiggin (Weston-super-Mare): It has been the practice of the Select Committee on Agriculture, since I had the honour to become its Chairman in 1987, from time to time to examine major sectors of the agriculture industry. It had been clear for some years that we should undertake an inquiry into the dairy industry, but we felt it right to await the ending of the Milk Marketing Board's statutory monopoly before proceeding.
The most well-known, perhaps infamous, aspect of the common agricultural policy dairy regime is the milk quota system. Quotas were an afterthought that were added to the regime after its other mechanisms had encouraged the over-production of milk and dairy products, and resulted in over-expenditure on the CAP budget. Milk quotas were a crude means of capping production, and to that extent they have worked well. However, it is a fact that the United Kingdom has never been allocated enough milk quota to be self-sufficient in dairy produce, because quotas were implemented in 1984 on the basis of historic production levels.
The United Kingdom dairy industry as a whole and with one voice believes that it is being disadvantaged because of its quota allocation, and there can be no doubt about that. Many of the witnesses who came before us sought some relaxation in the quota system to permit increased production. We explored a number of ways in which to achieve that. The simplest of the proposals was the suggestion that the UK should press for a larger quota in the Agriculture Council. In their reply to our report, the Government said that they would continue to register with the Commission the dissatisfaction felt in the UK about this matter, and that they would oppose any moves to cut the national quota.
We also explored suggestions that milk quota could be traded across national boundaries—cross-border trading—or that over-production in one country could be balanced against under-production in another—cross-border balancing. We concluded that there was little prospect of cross-border trading, given the different ways in which quota is administered in different member states. Should quotas remain after 2000, we believe that systems of administration should be harmonised to facilitate trade.
The Government agreed with the first part of our argument, and restated that their ultimate objective was the complete abolition of the quota system. We propose that the Government suggest to the Agriculture Council that a cross-border balancing system should be introduced. Although they agreed to continue to argue for increased flexibility in the quota system, the Government did not believe that such a proposal would be palatable to other member states, given that most of them had, in recent years, achieved or exceeded their quota allocations, leaving little scope for balancing.
A further means by which the quota system could be relaxed is the introduction of a two-tier system. Milk produced under the first 'A' tier would be sold on the European Union market in the usual way. Secondary 'B'

quota milk would be restricted to export markets, and would be subject to the prices prevailing on world markets. We were sceptical about the proposal for two reasons. First, it would be an additional administrative complication; and secondly, it would further entrench quotas into the structure of the EU dairy industry while increasing opportunities for fraud.
We viewed all those measures as no more than a short-term means by which the flexibility of the current dairy regime could be increased. For the longer term, we were convinced that radical reform of the dairy industry was inevitable and desirable. There is no doubt that the task of reform will be hindered by the fact that in several member states, including the United Kingdom, milk quota has achieved a significant monetary value.
Some have argued that reforms to the CAP that result in the abolition of quota should also compensate farmers for the loss of that asset. The Committee did not support that view, not least because when quotas were originally imposed they had no value. Indeed, in member states such as France, where quotas cannot be traded and transferred, they remain without value other than providing the holder with the right to produce milk.
We did, none the less, recommend that farmers should be given as much warning as possible of any changes that would result in the removal of quotas, or in a dramatic reduction in milk prices, and a consequent drop in the price of quota. For that reason, the removal overnight of import tariffs, export subsidies and quotas would, in the Committee's view, be highly problematical. In their reply to our report, the Government endorsed our analysis, and stated that that would not be a viable option. They favoured instead progressive cuts in support prices leading to the complete removal of price support, thus removing the need for any production controls. Even so, it was the Minister's view that, after 2000, when the current quota regulations expire, quotas will remain.
Our report was published in July 1996. At that time, we were told that the Commission intended to open debate on the possibilities for reforming the dairy regime this year, with concrete proposals unlikely to be introduced until spring 1998. The Committee was surprised to find that there was little sense of urgency on this matter among officials of the other member states that we visited, or in the Commission.
It is clearly vital that the Government push the Commission to bring forward its proposals as soon as possible. There are rumours that announcements will be made in the next few weeks, but that is not a minute too soon. By the time such proposals are agreed and implemented, farmers will have little time to adjust their businesses to the new circumstances that they will face.
In reality, nothing is likely to happen before 2000, so we suggested that, over a five-year period from 2000 onwards, support prices should be cut to world levels, import tariffs should be progressively reduced to zero, and milk quotas should be abolished at the end of the transition period in 2005. We also recommended that, to compensate for lower prices and not for the loss of the value of quota, farmers should be paid time-limited transitional payments via a dairy cow premium, which could be linked to requirements for environment and welfare-friendly farming techniques. On the whole, the Government endorsed our suggested approach, but it would be foolish to suggest that achieving those goals will be easy.
During our inquiry, we visited France, Italy and Ireland. The structure of the dairy industry in those countries is different from that of our industry. In France, we found strong support for the retention of milk quotas among farmers, Government officials and the Minister. Lower support prices and the removal of quotas were not appealing to their small farmers. Some dairy producers in France and Italy are very small indeed by UK standards. Our average herd size is 68 cows and rising, and almost half the national dairy herd is in herds of more than 100 cows.
In Italy, we visited a farmer who makes his living from 12 cows. He has stall spaces for 12 cows, has always had 12 cows and, as far as he is concerned, always will have 12 cows. United Kingdom dairy farmers may deride such a small enterprise, but there were aspects of that farmer's business and those of his neighbours from which our dairy industry could learn a great deal. He and his colleagues were part of a co-operative producing expensive Parmigiano-Reggiano cheese. They saw themselves not as milk producers but as cheese producers. For them, that meant being paid not when the milk went to the dairy, but when the cheese was marketed many months of maturation later.
The unified approach to milk production, cheese making and marketing in Italy, France and Ireland was in marked contrast to the conflicts that we have encountered in the UK dairy industry.
In 1994, the Committee held a very short hearing into the deregulation of the milk industry and the delays in negotiations. At that time, we suggested that Milk Marque had been guilty of "brinkmanship" in its negotiations. Once the revised scheme of deregulation had been approved by Ministers, the Dairy Industry Federation made its first priority, on the establishment of the deregulated market on 1 November 1994, a formal complaint to the Director General of Fair Trading. The DIF had maintained that Milk Marque was abusing its powerful position in the marketplace, accounting as it did for 65 per cent. of the market for raw milk in England and Wales, to push prices to artificially high levels.
We investigated the matter and found no firm basis for the DIF's claims. Through negotiations with Milk Marque, Mr. Bridgeman, the Director General of Fair Trading, secured a number of assurances on issues of concern in Milk Marque's trading practices. In particular, Milk Marque introduced more transparency into its selling process—a process that in any case results in lower prices to dairy farmers than many of the purchasing schemes operated by the dairy companies themselves. Indeed, given the prices being offered today, Milk Marque's price is at the bottom of the table.
In line with the Committee's recommendation, Mr. Bridgeman, having asked for our views, declined the DIF's request for Milk Marque to be referred to the Monopolies and Mergers Commission. We hope that, in line with another of our recommendations, the industry will be left in peace to adapt itself to its new circumstances. Indeed, it seems ironic that at least one industry commentator, Barry Wilson, suggested in February's edition of British Dairying that dairy companies have become so good at manipulating Milk Marque's selling system that milk producers might have a case to refer the dairy companies to the OFT—the other way around.
It became clear to us during our inquiry that the primary motivation of the DIF's main objection related not to Milk Marque's trading practices but to its very existence. Those who are acquainted with the history' of the UK dairy industry will know that the milk marketing boards and the milk marketing schemes were set up in the first place to help to redress the balance between small milk producers on the one hand and increasingly large dairy companies on the other. It was the Committee's view that the need for farmers to have a strong stake in the marketing of their milk continues.
It is reasonable to say that we had some understanding with Mr. Bridgeman of the OFT that, when the matter was resolved, he would allow Milk Marque—and the Dairy Industry Federation—to get on with its business. I however have a copy of a letter addressed to Andrew Dare, the director of Milk Marque, from the OFT on 22 January, which is headed: "Monitoring Milk Marque's Assurances". Part of the letter reads:
We shall be seeking information from a range of participants in the market but will obviously look to Milk Marque itself as a key source. Apart from the obvious data on prices and volumes etc we will be asking you to provide information which will cover:

1. How the starting prices were reached for the various contracts.
2. How individual bids were dealt with.
3. The criteria used for the allocation of supplies.
4. How any further contract prices and supply allocations were arrived at during subsequent bidding rounds.
We will be looking for information down to individual customer level and would ask you to ensure that all information relating to the current selling process is retained by Milk Marque.
Milk Marque does not feel that that is entirely leaving the matter alone. I endorse the comment that evidence is beginning to emerge that the dairy industry is learning to manipulate the Milk Marque selling system. I fully recognise, as does everyone else, that the recent drop of 2p a litre is not entirely due to the change in currency—although it is largely. I ask my hon. Friend the Minister to bear very closely in mind that it is not difficult for a handful of large companies, once they understand the system, to mutter to each other. I am not casting any direct aspersions, but I ask both him and the OFT to ensure that both sides of the industry, which have been at war for far too long, are not seen to be blameless. If he is going to look so closely at Milk Marque, he should look just as closely at some of the big purchasing dairies.
During the Committee's inquiry, the DIF claimed that the UK's dairy producers were among the most efficient in Europe yet the UK as a whole imports high value; added products such as speciality cheeses, fromage frais and yoghurt, and exports low value-added products such as butter and skimmed milk. We asked why UK dairy manufacturers, for the most part, were not able to match the performance of their continental competitors, despite the fact that prior to deregulation, UK farmers received some of the lowest prices in Europe for their milk.
Our report shared the views of the Ministry of Agriculture, Fisheries and Food and independent industry analysts that some restructuring of the processing industry was inevitable and that the root of the problem lay in the historic inefficiencies of the UK processing industry, which had been fostered by the milk marketing scheme, and the institutionalised and anachronistic system of end-use pricing. That system, in which milk prices were set by a formula depending on the intended use, protected inefficient processors and stifled innovation.
The effect of deregulation was to allow manufacturers to compete for milk according to their own needs and costs of production, with the result that inappropriate, inefficient or simply surplus processing capacity is being lost while more innovative processes are thriving, as we saw in my constituency when we visited Yeo Valley Dairies. It is imperative that, if the UK is to make the best use of any opportunities to increase production when quota restrictions are removed, our dairy industry continues to develop in a manner compatible with modern markets and consumer preferences.
We were nearing the end of our inquiry when the fateful statements on bovine spongiform encephalopathy and Creutzfelt-Jakob disease were made on 20 March. The Committee's members were determined to confine ourselves in the report on the dairy industry to covering issues directly affecting the dairy industry only. We considered other aspects of the BSE affair in other inquiries.
We noted that the selective or accelerated slaughter scheme, which the Government decided initially not to implement but then agreed to undertake, and which the National Farmers Union at first opposed and then supported, is not being undertaken for reasons of public health. We argued that compensation for cattle slaughtered under the scheme should therefore be closer to the replacement value of stock than to the market value, and that farmers who will lose a significant proportion of their herd should receive additional compensation. The legislation implementing the selective cull, which came into force on 24 January, sets compensation rates at 90 per cent. of the replacement value of cows or the market value, whichever is higher. In addition, farmers who lose more than 10 per cent. of their herds will receive additional payments. I certainly think that that is a fair balance.
Coming from the west country, I need hardly add that we looked at the contentious issue of bovine tuberculosis, which is accepted by many in farming and veterinary circles as being spread by the burgeoning badger population, especially in the south west and the midlands. In our report, we recommended that my hon. Friend the Minister should have farmers at the forefront of his mind when it came to any decision on future badger control strategies, and that, in addition, compensation for TB reactors should be raised to 100 per cent. of the animals' market value. As the House knows, the Government have established an independent scientific review to look into that matter.
This is definitely the last time that I shall present an Agriculture Committee report to the House. Perhaps I might take the opportunity of thanking all hon. Members on both sides of the House who have served on my Committee since 1987, when I was first elected as its Chairman. I hope that they have found the experience rewarding and feel that we have contributed in our small way to exercising the power of the House in monitoring the business of the Government. I should also like to thank the Clerks, their assistants, secretaries and advisers who have worked so hard to produce our end product, which is inevitably always in the form of a report. I am happy to say that I think that, with the wisdom of hindsight, we have been more often right than wrong—although clearly that is a matter for others to judge.
In the summer of 1969, I made my maiden speech on agriculture, and I am glad that I am addressing the same subject this morning. It remains our most important industry, and its prosperity is the strength of our countryside and our nation.

Mr. Paul Tyler: I did not expect to be called so soon in the debate. On behalf of my colleagues, may I thank the hon. Member for Weston—super—Mare (Sir J. Wiggin) for not only the report but his leadership of the Committee over a number of very difficult years for the industry, and the way in which his particular advocacy of the industry has informed debates in the House? I found the report so helpful that I shall confine my remarks to the points made in it. They will therefore follow the report's format.
In paragraph 37, the Select Committee says very firmly:
we would expect Ministers to take a very robust stand before and during negotiations.
Many hon. Members, I think on both sides of the House, believe that, because of the distractions of internal problems with which the industry and therefore the Ministry have been faced in recent years, far too little attention has been given to the United Kingdom's position in those crucial negotiations over the future of this sector of agriculture. I endorse the Select Committee's view that a much more robust attitude will be necessary in the new Parliament. When and if there is a new Government, a different attitude will no doubt be taken, but the importance of the negotiations cannot be underestimated.
There will have to be a triple-track approach to the issues with which the Select Committee has been concerned. First, the hon. Member for Weston—super—Mare referred to the subject of the national quota. Clearly, it would be totally unsatisfactory if other countries bid for more quota in the coming years and Britain did not make its claim as well. It may be that the total pool of quota is not going to change, but it would be devastating to British agriculture and to the dairy sector in particular if the same pool were sliced up, if a pool can be sliced up, in a way that is unfair to British producers. That is one of the major concerns of the farmers unions throughout Britain. If other countries are going to bid, we must be in there too—that is track number one.
Secondly, if there is to be some transition towards a new quota regime—a much lighter regime, perhaps—after 31 March 2000, it follows that, during that transition, there will be an urgent need to harmonise the existing different regimes in different member states. Ours is perhaps the exception that proves the rule. Ours is exceptional in terms of the speculative value that is attached to quota here, which has had a devastating effect on new entrants in particular, but has also damaged those who are seeking to develop in this sector.
Other countries have managed to avoid that speculative element. Members will recall, because our postbags were full of it, that, just two years ago, we were told that football clubs, pop stars and redundant Cabinet Ministers were all investing in quota because it seemed to be the best product for a quick return. We know that they did not, but that is not the point. The very fact that there was speculation about speculation caused a speculative price. Unless we can get away from that position, it could return.


It would be devastating if we were to find that we were the ones that were out of step in a transitional period that could otherwise benefit other competitive countries.

Mr. Ieuan Wyn Jones (Ynys Môn): One of the reasons why those companies were not able to speculate was that the quota remained attached to the land. The difficulty that the hon. Gentleman mentions is that, if quota were detached from the land, that speculation could take place.

Mr. Tyler: I am grateful to the hon. Gentleman. There is a consensus that detaching quota from the land would be a backward step. The Select Committee made that point and the Government in their response made it too. No one is now suggesting that, but there must be some way in which the management of quota is more effectively undertaken in the public interest, not just in the industry's interest.

Mr. David Harris: What exactly is the hon. Gentleman's party's policy on the future of quota? Is he in favour of abolishing it, phasing it out or keeping it?

Mr. Tyler: There is absolutely no question of quota being abolished. It would not be possible for Big Ben to strike midnight on 31 March 2000 and the quota to go completely. No one in Europe wants it to go like that, but, clearly, there will have to be a new regime. My point is that Britain must be in those negotiations to ensure that the transition is not to the disadvantage of our industry and to the advantage only of our competitors.
Thirdly, the Select Committee considered seriously and very well the issues of cross-border quota trading and cross-border balancing. That is the third track that we should be pursuing because, if there is to be a different regime after 2000, it will have to be on a much wider basis than the present national basis. There is room there for some horse trading to ensure that other countries recognise the value of that. If we run all three tracks at once, there is a chance of making progress. That is the view of many in the industry not just in Britain, but in some of the other member states, which share our view.
Here is an example. In the past, the British veto was perhaps necessary to preserve the position of British agriculture in common agricultural policy reform, but with the enlargement of the European Union, there may be more allies there and in future the Greek or Portuguese veto may hold us back from reform. That could be an area where majority voting may be to the advantage of Britain and its farmers.
On two-tier quotas, I have carefully considered the report and I have heard a great deal elsewhere too. Recently, I spoke at the conference of the Royal Association of British Dairy Farmers in Malvern. I heard some convincing arguments for reconsidering the issue of two tiers. It will not be easy—I do not think that anyone could deny that—but, after 2000, that may be the way in which we get some fluidity into the cross-Europe milk quota system. We should not discard it as readily as the Select Committee appeared to do and as the Minister did even more. I fear that farming unions are perhaps putting their heads in the sand in anticipating that it is a non-runner. It may be a runner for other EU states as well as ourselves.
On support prices and compensation, I notice that, in paragraph 66, the Select Committee says firmly:

The NFU's position was in stark contrast to MAFF's.
I hope that we will find that those positions come together, because it is critical to the future prosperity of this sector.
I want to move from quota to other wider issues that the Select Committee wisely felt it had to consider, but in passing I must make the comment that I think that this is the first time that anyone in the House on an official basis or indeed anyone outside has placed such a neat summary on the record of what happened with the 1992 CAP reforms. In paragraph 79, the Select Committee said:
To avoid the problems of 'over-compensation' which have occurred in the arable sector following the 1992 CAP reforms, the level of compensation payable should be automatically adjustable to take account of fluctuations in world dairy prices.
Hon. Members on both sides of the House must all accept now that the so-called Gummer reforms of 1992, which placed no cap or adjustment mechanism on the arable aid payments and which paid no attention to world cereal prices, were a disastrous mistake. They have drained away from the CAP budget huge sums of money, which both the taxpayer and the rest of the industry do not feel is justified.
On the way in which any compensation regime should be introduced, I take seriously the comment in paragraph 80 that any attempt to introduce some form of modulation that could result in distortion is dangerous. The Select Committee is absolutely right. I hope that today the Minister will tell us that, in approaching the issue of modulation in any future negotiations, it will be central to the British Government's position that modulation, if there is to be any, must be a matter for derogation, so that it can be appropriate to the particular circumstances of each member state. I suspect that it will come down the track sooner or later. It may not come in 2000, but sooner or later it will come, simply because of taxpayer resistance throughout the EU. If that is to happen, clearly subsidiarity must be the order of the day.
Before I leave the subject of the dairy sector and its marketing process, I have to say that the Chairman's remarks about the relationship between Milk Marque and the Dairy Industry Federation were apt, appropriate and extremely topical as a result of the cuts in pricing in the past few weeks. There is concern that the oligopoly among the dairy companies is just as likely to be a threat to competitive forces in the industry, and to the consumer's interest, as the position of Milk Marque, which after all does not have a complete monopoly—the situation is very competitive.
In the past few days, I have been disappointed that the Labour party—in a classic attempt to make post hoc propter hoc the basis of its policy—has started again to say that the creation of Milk Marque has destroyed the doorstep pinta. That is absolutely ludicrous, because we all know that the doorstep delivery of the pinta has gone for many social and economic reasons. I give the example of my own home. I am not there that often now, and my children are grown up. Our doorstep pinta eventually ceased when the milkman was no longer prepared to deliver a pint every other day, because it was not worth his while. Increasing numbers of women are going to work and realise that they do not want a pint sitting on the doorstep, going bad during the summer or demonstrating that the house is empty, and people inevitably have chosen other means.
The doorstep pinta did not suddenly disappear because the House passed a law; it was part of a general social trend. It is quite absurd—it is essentially taking a dinosaur approach to social trends—for the Labour party to pretend that the pinta disappeared because we introduced a new form of milk marketing. That is ridiculous, and it shows how out of touch the Labour party is with reality.
Some extremely important issues were not given quite so much room in the report. However, we should give them some attention now, because they have loomed large in our affairs since the report's publication. I noticed the comment on the over-30-month scheme, in paragraph 150, which states:
it would be unduly harsh to he over-critical of the delays associated with getting the scheme up and running".
Surely that is the understatement of the century. Being "over-critical" reflects the fact of life. Everyone in the dairy sector and in farming knows that the scheme was a shambles, and it was rightly categorised and castigated as such at the time.
Since then, at long last, the selective cull proposals have been presented to us, to the Commission and to other member states. In its report—which was published before the details of the proposals were known, although the rough parameters were—the Committee states:
In our judgment, it lies at the boundaries of political acceptability.
The Chairman did not refer to that paragraph—which is also an understatement—in opening this debate.
In the coming weeks, if the cull level in some of our prime, closed and most productive herds reaches a point at which milk production is severely damaged for some time—because replacement will not be easy, particularly if sourcing must be from equally well accredited herds—we will have a problem. I hope that the Minister will address that issue—although it may lie in the territory beyond 2 May, and perhaps in someone else's field. Nevertheless, I hope that the Ministry still has a bit of soothsaying ability.

Mr. David Nicholson: A few moment ago the hon. Gentleman vigorously castigated the Labour party for playing politics. I wonder if I can tempt him to say something about the consequences for the dairy industry, abattoirs and others—particularly in the south-west, where concerns have recently been expressed—of the Labour party playing politics over meat hygiene?

Mr. Tyler: I do not think that I should be diverted on to that matter, except to say that farmers are fed up with living with the consequences of the shambles, the mismanagement and the culture of secrecy that has take over in the Ministry of Agriculture, Fisheries and Food. That is the real complaint. The complaint is not about information coming to light—in many cases very properly so.
The Committee also dealt with the problem of the welfare of dairy cows. However, there is another problem which is very much connected to public concern and interest in genetic development, and about going down a one-way street in developing genetic improvements in dairy cows. The report contains a very interesting section on lameness in cows, which I discussed yesterday with the Farm Animal Welfare Council.
I notice that some hon. Members are indicating that I should not allow any more interventions to my speech and should bring it to a conclusion. Before I do so, 1 should say that the long delay in establishing the Krebs inquiry into the connection between tuberculosis and badgers has been a disaster for the industry, particularly in the south-west. Its chairman was appointed last summer, after a wait of many months. The other members were not appointed until last autumn, and the committee is only now starting. I can understand the Government trying to avoid embarrassment before polling day, but that delay was absurd.
The Ministry's credibility is at an all-time low at home and abroad, and it was not helped by last summer's counter-productive and ludicrous beef war, which delayed progress on eradicating BSE not only in the United Kingdom but across Europe and on introducing the certified herd scheme and effectively regulating meat processing in the single market. If we are able to persuade the Commission and other member states to accept our criteria and standards in certifying herds and controlling meat processing, those criteria should apply across the Union. I believe that that is critical. If there is a single market, it is absurd that our exports should be controlled in a manner different from that applying to German exports to this country, for example. The same rules should be applied.

Mr. William Cash: Will the hon. Gentleman give way?

Mr. Tyler: No, I will not give way; other hon. Members want to speak.
As a direct result of the way in which the Government played their cards last summer, we are now marginalised in some of the most important discussions and negotiations that will ever affect the agriculture industry, and particularly the dairy sector. I hope and pray that we will have a new start after May 1.

Sir Roger Moate: I shall try to make a few points very briefly, as this is such a short debate. I, too, compliment my hon. Friend the Member for Weston—super—Mare (Sir J. Wiggin) on his eight years as Chairman of the Agriculture Select Committee. I have had the privilege of being on it for two years, and have come to respect his great support for agriculture, knowledge of the industry and the way in which he has created a cohesive and happy Committee.
The only complaint that I would make of the Committee—it is a feature of all Select Committees—is that its very cohesion tends to produce reports containing conclusions that are designed to attract maximum support in the Committee. The reports are therefore less abrasive than they might be, which thereby enables Ministers always to respond by saying that they agree with the conclusions.
My hon. Friend the Member for Weston—super—Mare mentioned one of those conclusions, and said that, on a matter of fundamental importance, the Government agreed
with the Committee's conclusion that the sudden removal of support prices and quotas in the dairy sector is not a viable option.


However, we did not come to that conclusion, although the Minister agreed with it. Before that, we said:
the 'Big Bang' solution of drastic cuts… and the abolition of quotas overnight… would appear to be highly problematic".
"Problematic" was a carefully chosen word. If one goes back to our report, we said something that I think is more significant. We said:
the 'Big Bang' solution should not be rejected. It could be that a rapid radical reform would be more advantageous to producers as well as consumers if accompanied by a well-engineered programme of compensation.
The matter must be examined within the context of a much wider-ranging discussion about what should happen in 2000. The hon. Member for North Cornwall (Mr. Tyler) mentioned our earlier comments—which could have been interpreted as criticising the Government's position, and which the Government have sensibly chosen to ignore. The comments contain some criticism, although it is not a specific criticism of this Government. It is the expression of worry about a general lack of zeal, determination and robustness in ensuring that we have a proper solution by 2000 and that we tackle the problem soon.
According to paragraph 37 of the report:
Mr. Hogg told us that MAFF's approach to the question of dairy regime reform would depend on the Commission coming forward with specific proposals.
We could wait a long time for that. It continues:
Mr. Hogg stated that 'the sensible man… decides what is attainable and then negotiates for that, otherwise you end up with egg on face'. This view contrasts with the strong statements of policy by MAFF. Given the vigorous and critical nature of the extended debate that will undoubtedly take place… we would expect Ministers to take a very robust stand… during negotiations.
That robust approach had been reflected in Ministry documents that were extremely impressive. Page xxi of the report refers to
a scathing critique of the dairy regime
in which
MAFF claimed that it was 'manifestly absurd to operate a support price system which encourages excessive production while at the same time imposing quotas to offset this'".
That is the background to the issue. There is widespread concern that we shall end up with half-baked proposals from the European Community, a serious entrenchment in defence of the present position and only mild changes in 2000, so that the present regime, perhaps with some minor changes, may well continue for years.

Mr. Cash: Does my hon. Friend accept that one reason why he is almost certainly right is that there is absolutely no desire on the part of other member states to make the necessary adjustments to ensure that the British dairy farmer who is efficient gets reasonable treatment? The problem has been plagued by a determination to ensure that the British dairy farmer does not get the fair deal that he deserves.

Sir Roger Moate: I am sure that my hon. Friend is right. Ultimately, of course, there has to be agreement, unless, by some miracle, we can negotiate, or—to use the same phrase as my right hon. Friend the Secretary of State for Health—renegotiate ourselves out of the common agricultural policy and the common fisheries policy. We

have to have agreement. Unless the British position is put robustly, it is unlikely that we shall secure the right deal for British agriculture.
There is no difference of view between us. The Government's position is clearly stated in their documentation, but will the British Government take a robust position in favour of significant reforms in 2000? I am worried about that. I have heard nothing from hon. Members on the Labour Front Bench to suggest that a Labour Government would take a more robust line. In fact, it is the reverse; they are determined that Britain should not be isolated in Europe or be a lone voice. We have to take a strong position, however, because the British consumer and the British dairy industry are seriously disadvantaged by the present regime.

Mrs. Ann Winterton: Does my hon. Friend agree that, whatever new regime is introduced in the European Union, it should not repeat the experience of the imposition of quotas in 1984? They were introduced retrospectively and at great disadvantage to Britain. Does he further agree that our dairy industry needs time to introduce change so that it is not severely disadvantaged?

Sir Roger Moate: We have to move rapidly to a position where we are not restricted by present quotas, or prevented from producing as much milk as under the present regime. UK Ltd. is probably disadvantaged to the tune of £1 billion or £2 billion, and many individual dairy producers are seriously disadvantaged. Although there might be historical arguments for those quota levels, how long can we continue to base the system on historical factors that are no longer relevant?
Even if we had a rapid and radical solution, no one suggests that anything could be achieved overnight. However, our objectives and policies must be clear. Our objective must be to maintain a healthy dairy industry in Britain.
Finally let me point out one or two disadvantages. The table on page xxiii of the report sets out the disadvantages to Britain in direct expenditure on support to the dairy industry. It shows that the average support per cow in the Netherlands is £434. In Ireland, the figure is £193; in Denmark, it is £407; and in the United Kingdom, it is £81. That is pretty dreadful.
Most subsidies provide export support, and we cannot export because of quota restrictions. Many other subsidies provide price support, but that is uniform across the Community. The direct support discriminates against the British industry, and that is quite unacceptable. The biggest discrimination against the United Kingdom, as my hon. Friend the Member for Weston—super—Mare made absolutely clear, is that we are required to produce much less than our needs and are therefore obliged to import dairy products. We cannot allow that discrimination to continue, so we must present a strong and robust case at the Council of Ministers and the general negotiations that are likely to take place.
It is also worrying that dairy farming is not included in negotiations at the intergovernmental conference so negotiations will have to take their own slow and separate course. We have threatened to veto the IGC negotiations unless we get satisfaction on quota hoppers in fishing. How much more sensible it would be if we refused to allow progress at the IGC unless there were serious reforms of the common agricultural policy.
For how much longer will we be told that there will be reform, while year after year we have to tolerate certain unacceptable features of the CAP such as the high cost to the consumer of £20 per week per family? We spend £34 billion a year on supporting agriculture in Europe. The British taxpayer still subsidises the production of bad wine in France and of tobacco in Greece. It is universally agreed that the system is unacceptable and we really must make a determined attack on it and press for the reform of the dairy regime in 2000 and the rapid phasing out of the present system thereafter.

Mr. William Ross: I shall speak only briefly, as the report refers to Northern Ireland.
Many of us are sorry that the hon. Member for Weston—super—Mare (Sir J. Wiggin) is leaving the House. He has been a very robust Member and has always expressed his views clearly. Although I do not necessarily agree with everything he says, he puts his views firmly and I respect him for that. He will be a loss to the House and to his party.
The hon. Gentleman will be a loss, especially to the farming community, given the attitude of the Minister of Agriculture, who appears to negotiate on the basis of what might be attainable. The hon. Member for Weston-super—Mare would have said, "This is what my country needs and, regardless of what happens, I am going to get it." If the Minister took that approach to Europe, we might end up with what the country needs rather than what we will graciously be given. I do not think that the hon. Member for Weston—super—Mare would have been as soft in securing what the country needs.
One of my pet subjects is tuberculosis in badgers. In my opinion, the disease is a consequence of the British attitude to wild animals. Man is the supreme predator. As we got rid of all the other predators in Britain many years ago, we have a duty to manage the remaining wildlife and to maintain a balance. Unless we do so, some parts of the country will be overrun with badgers and foxes.
Folk will remember that some years ago there was a considerable trade in fox skins out of Northern Ireland. It faded because of all the hullabaloo about wearing furs. When it was over and done with, I tabled a parliamentary question on how many fox skins had been exported from Northern Ireland over five years. The average for each year was 23,000. If anyone had tried to tell me that 23,000 foxes a year could be killed in Northern Ireland—I suppose that some of the foxes probably came from the Irish Republic—I would have laughed them to scorn, but the figures are there. There are a lot more wild animals than most people think.
Mink have caused immense damage. We should have made a serious effort to wipe them out. All sorts of other animals also cause damage, such as magpies and raptors—an issue that will come back whether we like it or not. We had better start thinking straight about these matters rather than allowing ourselves to be ruled by emotion, as we have for far too many years. Some hard decisions will have to be made. Some of us will have to express and defend our attitudes more clearly against all those who look at little furry animals or nice little birds and shut their eyes to the consequences of the imbalances that have arisen among our wildlife.
That is a pet subject of mine that I shall not pursue too far, because I can see that you are becoming a little uneasy, Mr. Deputy Speaker. We have lots of badgers—I have some on my land. The foxes come round every year and stink them out, breed and then go away again and the poor old badger has to clean his house out. We shall return to TB in badgers when the scientific evidence is available. Whatever that evidence shows, my earlier remarks will still apply.
Northern Ireland is the only part of this country with a land boundary—with a nation that is a strong competitor for our milk and dairy products. The report refers to the fragmented nature of the Northern Ireland dairy processing industry. In another context, instead of lamenting that fragmentation, we would praise it as evidence of strong competition for the market, giving people choice.
We lament that fragmentation because the Republic has built up a strong, vertically integrated milk products industry. It has purchased far too much of Northern Ireland's processing capacity and is still buying far too much of our milk production. Too many decisions are being taken south of the border rather than in the United Kingdom. A dangerous situation for the Northern Ireland dairy industry in the long term has been created and is steadily expanding.
As well as noting and agreeing with the Committee's comments on the structure of the dairy industry, I hope that the Government note the concerns expressed by dairy farmers in Northern Ireland and my comments on the processing sector in Northern Ireland, the long-term dangers and the need for the Government to do something about it. If they do not, heaven only knows where we will end up. I fear that we shall end up entirely in the hands of processors outwith the United Kingdom. That should not be acceptable to the House or to the Government.

Mr. Richard Alexander: This has been one of the last inquiries conducted under the chairmanship of my hon. Friend the Member for Weston—super—Mare (Sir J. Wiggin). This morning we have heard probably his last speech in the House. The debate may feature the last speeches from some others of us, but that is for the electors to decide.
I pay tribute to my hon. Friend for his chairmanship over the past 10 or 11 years. His professionalism and his dedication to agriculture have been admired by his colleagues throughout that time. He has been a firm and fair Chairman, running his Committee with authority and always with a sense of humour. He has shown great friendship to us all, regardless of party. I know that those sentiments will be shared by all members and former members of the Select Committee on Agriculture. We wish him well.
We have had quotas since 1984, and they are an established part of the dairy farmer's way of life. They were widely objected to at the outset, as I remember well from my constituency, but now they are widely accepted, as happens with most changes. The system was renewed in 1989 and 1992. It will expire in just over two years, unless it is extended again, which seems unlikely. Because of the uncertainty, farmers need to know what the situation will be after 2000.
It goes without saying that quotas are a valuable asset for the farmer fortunate enough to have them. The change in 1984 was traumatic for farmers. Cutting off quotas and


going for a completely free market after 2000 would be equally traumatic, resulting in a huge loss of asset value for dairy farmers through no fault of their own.
We cannot, however, ignore the fact that there must be some change in 2000, or at a reasonable time after that. The report and the debate are therefore timely, enabling both major parties to set out their thinking on how the situation should be resolved. When they do so, I hope that two factors in particular will be uppermost in their thinking.
First, we must make it clear that any return to the Commission's original idea of the early 1990s of limiting compensation according to a maximum number of cows would be unacceptable. The Commission was thinking of a maximum of 40. It called the idea modulation. British farmers, with their much larger herds, would call it something else, seeing it as another back-door way of harming a settled and prosperous part of our agricultural scene. I look forward to hearing from my hon. Friend the Minister and from the hon. Member for Newcastle—under—Lyme (Mrs. Golding) that the Commissioner will be told that the plan is a non-starter. We do not know what the Commission will propose. We are saying that we must not allow drift beyond 2000, which would result in uncertainty and quotas by default. If we are going to have quotas for the foreseeable future, we should be told.
Secondly, we should insist that there should be no reduction in this country's quota in the meantime. We are not self-sufficient in milk and we have a strong case for more quota rather than less. The impression hitherto has been that the Ministry is unlikely to press for additional quota. I regret that. Other countries, with records perhaps less authentic than ours, are robust in asking for extra quota in the price-fixing negotiations. We should do the same, and we should certainly argue against any suggestion of quota cuts. I would welcome assurances from those on the two Front Benches that that is their thinking.
It is tempting to say that we should not alter the quota system. It is not broke and does not need fixing. Farmers like the system, which protects them against cuts in support prices and is a capital asset in their hands. If we continue as we have done, comfortable though it may be, we must recognise that, according to the Commission's figures, in seven years there will be a surplus of 8.6 million tonnes of milk. To deal with that surplus, we are likely to have to end production controls.
That will mean a reduction in price for the producer, but that could be balanced over the years by greater access to world markets, perhaps coupled with suitable compensation for loss of a capital asset. Other countries are expanding and exporting their milk production, and we should do so too. We have the option of protecting the present regime for as long as we can or of getting into world markets. We cannot do both.
I am not too attracted by the idea of 'A and B' quotas; neither was the Select Committee. They have operated in the sugar regime for some time. They produce stability, but the price is uncertainty when each round of negotiations looms. We are in a minority—one country out of many—when it comes to those negotiations. Our competitors are not widely known for protecting Britain's interests in sugar or in anything else.
Another price of quotas is the inability to produce more for world markets. To produce more, British Sugar has to set up plant abroad, whereas it should be able to produce

more in this country, in excess of quota, and sell abroad. Milk 'A and B' quotas would defeat the object of getting into world markets—markets that the United States of America, Australia and New Zealand are already getting into with some success, leaving us and our access to those markets behind. As my hon. Friend the Member for Weston—super—Mare said, while "A and B" quotas might tide the farmers over for a little while, the imposition of two-tier quotas would add an unnecessary administrative complication to the milk regime.
The uncertainty needs to be resolved soon. We should do so now, as farmers are fully aware that the quota system is likely to end. We received evidence from the National Farmers Union that it is advising its members that
they must not budget for quotas being there after the year 2000".
In addition, the president of the National Farmers Union told farmers:
the time is getting nearer when the best interests of UK dairy farmers may be to seek an end to the milk quota system".
Whatever new system is proposed, we shall have only a voice; decisions will be made by the European Commission. We must make it clear to the Commission that it must recognise the loss of value that would follow—perhaps time-limited over five years while support prices and import tariffs were reduced.
We must remember that the dairy industry is valuable and profitable to this country. If we destroy that value and profit overnight without a fair lead-in period, we shall hand the industry over to the expanding milk producers in the world. The object of the reform, whatever it may be, must be to be up there with them, competing in world markets, not to hand it over to them.
We must look after the industry, which has served the country and agriculture communities well for many years, particularly since 1984. Things will have to change but it is the task of my hon. Friend the Minister to ensure that that change comes about in a sensitive way with a firm eye to the industry's future prosperity and its future opportunities in the world.

Mrs. Llin Golding (Newcastle-under-Lyme): I should like to add my thanks to the hon. Member for Weston—super—Mare (Sir J. Wiggin) for the work that he has done on the Select Committee on Agriculture. I wish him well, badgers or no badgers.
Milk is one of the most important foods and, given the damage that the Government have inflicted on the dairy industry, this morning's debate is useful. It is unfortunate, however, that we cannot include the European Commission's Green Paper on the proposed reforms to the common agricultural policy dairy regime, because it is not expected until next month. The Labour party believes that the Council of Agriculture Ministers will have to take some hard decisions to reduce protectionism within the EU milk regime. I doubt whether the Minister will be too worried about that after 1 May, as it might no longer be his job.
I remind the hon. Member for Faversham (Sir R. Moate), before he starts complaining, that the Government have been in power for 18 years, and the Labour party has not had a chance to deal with the CAP in Europe.
A priority will be to get rid of the quota system, which keeps prices to the consumer up by preventing farmers from producing more milk. While I am grateful for the excellent briefing that I received from Consumers in Europe, Milk Marque, the National Farmers Union and others on quotas, it would be far better to await the Commission's Green Paper before entering into detailed discussions on that matter. Perhaps I should put it on the record that we share the Government's scepticism about the possibility of obtaining increases in quota, cross-border trading of quotas and other devices to reduce the damage done by the quota system. We believe that we must now concentrate on ensuring that quotas are phased out.

Mrs. Ann Winterton: Will the hon. Lady give way?

Mrs. Golding: I am sorry, but I am strapped for time and do not intend to give way.
As my hon. Friend the Member for Edinburgh, East (Dr. Strang) has made abundantly clear, it is imperative that the cost of the milk regime, which is now approaching £4 billion a year, is cut and the money spent more wisely. Much of the British and other European taxpayers' money spent on the EU dairy regime is wasted. For example, why should the EU spend more than £1,500 million on export refunds and £390 million on skimmed milk, to feed calves on the continent?
Our objective is to ensure that the CAP will take explicit account of its influence on food standards and diet. By linking agriculture policy to food policy in that way, we could ensure that the diet of our people, particularly our young people, improved. Anyone who doubts the great value of milk to young people should read the pack on milk and children prepared by the National Dairy Council. I do not intend to spend my time performing a commercial break by listing all the nutrients contained in milk, which are vital to our nation's health, but I must draw attention to the importance of providing calcium, for both young children and older people.
Because the Labour party is convinced of the value of milk to young people, we continue strongly to oppose the decision to end taking up the European subsidy on secondary school milk and milk for school meals. CAP money should be used to subsidise milk in schools. It is an investment in people and an important element in improving the nation's health. We simply cannot understand the Conservative party's change of attitude towards milk. It was not long ago that a former Tory Agriculture Minister, the right hon. Member for Fylde (Mr. Jack), was telling us of the
nutritional benefits that derive from establishing a milk drinking habit at an early age and maintaining it through the teenage years, when it is especially important for adolescent girls, for whom it may help osteoporosis in later life.
In another context, the Government constantly tell us that they follow scientific evidence. On what scientific evidence have they gone from the positive attitude of the former Agriculture Minister to the negative, uncaring attitude towards the health of young people expressed by the current Agriculture Minister?
It is clear that the philosophy shown by Thatcher the milk snatcher has come to pervade the whole of the present Government. They remove milk from our schools

and stand by and watch our doorstep delivery system disappear. The week before last, following a campaign waged by the Labour party and the National Dairyman's Association, my hon. Friend the Member for Edinburgh, East presented to the House a petition signed by thousands of people in support of the doorstep pinta. The signatories know how important the doorstep delivery service is to the whole community as well as to the dairy industry, and they are concerned about its rapid decline.
In 1982, 86 per cent. of households in England and Wales received doorstep deliveries; by 1996, the figure was only 39 per cent. The Minister of Agriculture, Fisheries and Food does not help by saying merely that that reflects the difference between supermarket and doorstep prices: what about those who cannot get to the supermarket—the elderly, the sick, the housebound and those with responsibility for others whom they cannot leave? They depend on the doorstep pinta.
Far from hitting the delivery services, as they did by taxing milk floats, the Government should be asking for CAP money to help such services. If £390 million can be spent on feeding calves, some can be spent on helping that useful service to the community.
The threat of applying value added tax to our pintas must be removed. The Chancellor said that a strong case could be made for putting VAT on food, children's clothes, transport, sewerage and newspapers and added that no amount of lobbying need put the Government off. Lobbying might not, but a general election certainly will, especially when people realise that the price of a doorstep pinta could be raised to 44p.
The Dairy Industry Federation has severely criticised the Select Committee report. It said:
the section on the UK Dairy Industry, however, was based on inadequate research and was generally dismissed in the industry. It contained serious factual errors… In particular without seeing any of the economic evidence which has been evaluated by the Office of Fair Trading, the Committee expressed a view on how the OFT should exercise its powers in a competition investigation of Milk Marque Ltd. under the Fair Trading Act 1973.
It is clear that relations between the Dairy Industry Federation and Milk Marque are still far from satisfactory. In particular, the federation is concerned about stories that Milk Marque, which controls about 60 per cent. of the supply of raw milk, is discussing with the City the possibility of its acquiring processing capacity. That could operate in ways that would be extremely unfair and detrimental to existing processors.
The Select Committee said:
We would not wish to see Milk Marque attempt to develop its own processing capacity whilst it remains a strong force in the market for the supply of raw milk.
The Dairy Industry Federation would like the Government to reaffirm the stance they took in response to the Select Committee, when they said:
This is a matter for competition law and the competition authorities.
It would be helpful if the Minister could reassure the Dairy Industry Federation that they have no intention of supporting any acquisition by Milk Marque of processing plant, until a thorough investigation has taken place.

Mr. Ian Davidson: Does my hon. Friend agree that the competition authorities do not police the industry adequately in Scotland, where there is a


danger of Wiseman Dairies acquiring the milk-producing side of Scottish Pride, which would give it about 80 per cent. of the milk market in Scotland? That has not been halted by the competition authorities, and there is no reason for us to have any faith in the ability of those authorities to safeguard the industry's future.

Mrs. Golding: My hon. Friend makes an interesting point. Perhaps the Labour Government who take office in a few weeks' time will take a much sterner attitude to competition in the industry.
I emphasise the importance that the Opposition attach to milk. In the few weeks that remain to them, we hope that the Government will in turn do all that they can to encourage this most important of our industries.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): This has been a most interesting debate. I hope that the House will forgive me if I make one or two preliminary points.
First, many issues can be raised in relation to the dairy industry and dairy farmers, and in recent days many of those issues have been raised in relation to meat hygiene. The House will be interested to know that, with Madam Speaker's permission, my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food intends to make a further statement on meat hygiene later this afternoon; the House will understand if I do not anticipate his comments on such matters.
Secondly, I hope that the House will forgive me for pointing out that my responsibilities and those of the Select Committee include not only farming, but fisheries and food. I am the Minister with responsibility for fisheries, and today is undoubtedly the bleakest day for the fishing industry for a long time; I am sure that the whole House will join me in sending condolences to the families of the seven fishermen who lost their lives yesterday.
That is a sorry reminder to us all that fishing is probably still the most dangerous occupation, and I hope that that fact will always be remembered by conservationists and others, who sometimes attack the industry. I am sure that the marine accidents investigation branch will carry out the necessary inquiries, but nothing will take away from the fact that it is a dangerous industry.
I add my compliments to my hon. Friend the Member for Weston—super—Mare (Sir J. Wiggin), who has chaired the Select Committee so ably for nearly a decade. His excellent speech today was a model of the wisdom that he has brought to bear during his chairmanship. He has given sterling service on the Committee for many years and he has brought considerable knowledge and expertise to bear on all the proceedings on agriculture in the House. I know that I speak for all hon. Members when I offer him our thanks for his contribution over the years.
Other members of the Select Committee have made excellent speeches: in particular, my hon. Friends the Members for Faversham (Sir R. Moate) and for Newark (Mr. Alexander). Other Conservative members of the Select Committee, including my hon. Friend the Member for Congleton (Mrs. Winterton), have been here throughout the debate, as have my right hon. Friend the Member for Northavon (Sir J. Cope) and my hon. Friends

the Members for St. Ives (Mr. Harris), for Stafford (Mr. Cash), for Taunton (Mr. Nicholson), for Cirencester and Tewkesbury (Mr. Clifton—Brown) and for Shoreham (Mr. Stephen).
It is interesting that, so far as I can see, not a single Labour member of the Select Committee has been present for any part of the debate. I am sure that the agricultural community and the dairy industry will recognise the fact that, despite whatever honeyed words come from the hon. Member for Newcastle—under—Lyme (Mrs. Golding), when it comes to it, the Labour party is not interested in farming, the countryside or, in truth, the food industry.
I shall endeavour to reply to the specific questions posed in the debate. The Select Committee's inquiry into the dairy industry and the common agricultural policy regime was both thorough and wide ranging. In its analysis and its conclusions, it revealed considerable common ground with the Government. In our response to the report, the Government were able to agree with most of its comments and recommendations.
With the current quota regime due to expire on 31 March 2000, farmers are understandably increasingly putting their minds to the question of what lies beyond. That is crucial for planning their businesses, and it impinges on decisions about expansion or whether to buy or lease quota. Hon. Members have only to listen to "The Archers" on Radio 4 or visit dairy farmers in their constituencies to get a flavour of the uncertainties facing the dairy industry.
The Select Committee's detailed analysis of the way forward for the CAP dairy regime could not have come at a better time. As the report says, most of the hard policy choices lie in the future. However, I can tell my hon. Friend the Member for Faversham that, in taking those difficult decisions, the Government will, of course, bring to bear the zeal and determination that he, the House and our dairy industry expect of us.

Mr. Cash: Will my hon. Friend do everything possible to ensure that other member states do not get more quota unless we get more for our farmers? Will he ensure that the Italians cough up the fines that are due and that they obey the quota rules? Can he give the House an assurance, as I suspect he was about to, on modulation of compensation and ensure that farmers do not bear unreasonable income loss, but get proper compensation if the CAP dairy regime is reformed?

Mr. Baldry: It would be unacceptable for another member state to get more quota if the UK did not get more. As the House knows, we are deficient in quota. We have continuously made it clear that we do not believe that other member states should receive further quota.

Mr. Ieuan Wyn Jones (Ynys Môn): Will the Minister give way?

Mr. Baldry: Let me deal with one intervention before I tackle another.
Spain, Greece and Italy are in deep financial difficulties with the Commission in respect of making payments, because they have failed to cough up last year's super-levy. The Commission is, at last, getting tough with member states that do not comply with the rules, and not before time. We must ensure that, when we are not


self-sufficient in milk quota, other member states play by the rules, and that the Commission insists that they abide by the rules.

Mr. Jones: rose—

Mr. Baldry: I should like to make some progress before I take another intervention.
The debate on the hard choices has already started. Our views on reform of the dairy regime were published in our response to the Select Committee report. We tabled the response at the Council of Agriculture Ministers as a contribution to the discussion in Europe. We proposed progressive reductions in support prices over five years, to bring them into line with world prices. At that point, quotas would become meaningless and could be abolished. During the transition period, cross-border transfer of quotas should be introduced, with a time-limited income payment scheme to dairy farmers designed to help them to adjust to the removal of support prices and quotas.
It is clear from our discussions in the Council of Ministers that several member states and the Commission share our analysis of the pressures on the quota system. As the Select Committee states in its report, at some stage, the European dairy industry must come to terms with trading at world prices. As a way of preparing the ground, we have called on the Commission to propose cuts in support prices as part of this year's price fixing, along the lines advocated by the Select Committee.
Regrettably, negotiations on the future shape of the CAP regime will not be as clear between now and March 2000 as hon. Members would like. The message that should go from the House to the Commission and to Europe is that we all owe it to the dairy industry to take early decisions. We are determined to put pressure on the European Commission and the Council of Ministers to ensure that early decisions are taken, so that dairy farmers can plan sensibly for the future.
Quotas are not the only concern of dairy farmers; there is also the selective cull. Many farmers stand to lose a number of their cows in coming months. We fully understand that, and that is why we have made it clear that we shall be as flexible as possible in the operation of the cull. In our package of measures to compensate for animals slaughtered in the selective cull, we have sought to be fair. We recognise the difficulties of balancing production against quota towards the end of the quota year, and have secured an extension of the quota leasing deadline for this year for producers affected. Some 15,000 dairy farmers have registered their interest in using that facility, although I suspect that few will have cows taken before 1 April.
Farm visits under the selective cull are well under way. Slaughtering has started. In Great Britain, the first visits to natal herds—the herds where bovine spongiform encephalopathy cases were born—started in the last week of January. By the end of last week, 517 natal herds had been visited and 1,300 animals were subject to provisional slaughter notices. Slaughtering is expected to start this week, with the slaughter rate building up over the next few weeks.
In Northern Ireland, farm visits started a week earlier and all but one of its 124 natal herds have been visited. The first slaughter, of 206 animals, occurred on 28 February. We hope to be able to complete the selective cull in Northern Ireland in the near future.
The quota regime affects not only farms but dairy processing. The UK dairy processing industry is likewise held back by quotas. As we never tire of reminding colleagues in the Agriculture Council, the UK is seriously in deficit in milk, but we are one of the EU countries best suited to milk production. The quota system deters investment, inward or home grown, in dairy processing. In an ever more global marketplace, world markets are growing. Multinational companies will site their processing facilities where raw materials are readily available at world prices.
The constraints of our commitments under the general agreement on tariffs and trade Uruguay round, to reduce subsidised exports, mean that large-scale investment in dairy processing in the European Union, let alone the UK, is unlikely as long as quotas and high support prices remain. The GATT constraints are already starting to bite. Reform of the dairy regime is as crucial for our dairy processing industry as for farmers.
Another important issue in recent years, as the Select Committee made clear, has been the deregulation of the milk market. That, too, has impinged as much on the processing industry as on dairy farmers, and the Committee was right to devote as much time to the subject as it did. As we stated in our reply to the report, the Government welcome the Committee's endorsement of deregulation. To some extent, the industry is still adapting to its new freedom after the abolition the milk marketing boards. By industry, I mean both processors and farmers. Some farms chose to stay with Milk Marque, some have joined forces to form milk groups and some chose to deal directly with the dairy companies.
After sharp price increases, as buyers competed for supplies for the first time, milk prices returned to their previous levels. While other factors, notably the strength of the pound, have been at play, I think that that is evidence that the deregulated market is bedding down. Although dairy farmers remain as shackled as are farmers by the quota system, the abolition of the milk marketing scheme has removed one obstacle that hampered the development of an efficient, innovative dairy processing industry.

Mr. Davidson: Will the Minister give way?

Mr. Baldry: The hon. Gentleman wandered into the debate at about 12.20 pm, the only Labour Back Bencher to grace us with his presence. Perhaps he cannot tell the time. Ten minutes' attendance by one Labour Back Bencher is not much.

Mr. Davidson: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to make an outrageous slur without seeking to ascertain why I was elsewhere? I have a shipyard on the verge of closing today—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. I have got the hon. Member's message. The Minister is responsible for his own speech.

Mr. Baldry: The agriculture industry will regret that a false point of order has prevented me from responding to some of the points made in the debate. Again, that sums up the Labour party's attitude towards agriculture.
Deregulation has led inevitably to some restructuring and a loss of employment, but employment in the dairy processing industry has declined in recent years, and the best protection for jobs is an efficient and successful industry. We shall ensure that the competition authorities continue to determine competition policy.
The past 12 months have been difficult for dairy farmers, and that is why it was such welcome news that my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food was able to announce last month that the residuary milk marketing board would shortly be making a cash repayment of some £15 million to dairy farmers, as a further step in winding up the old board's affairs. Dairy farmers are shortly to benefit from a share of that £15 million. It has also been a difficult year for the milk processing industry, but we must look forward—

Mr. Deputy Speaker: Order. We now come to the debate on the development of democracy in central and eastern Europe.

Democracy (Central and Eastern Europe)

Sir Geoffrey Pattie (Chertsey and Walton): Seven years ago this month, my right hon. Friend the Member for Mole Valley (Mr. Baker) invited me to take over Conservative central office's responsibility for assisting centre-right parties in central and eastern Europe. In the first two years from 1990, we had to work extremely hard to try to scrounge air tickets to visit the region and to encourage people from the region to come to the United Kingdom.
I pay tribute to members of the team who worked with me then, and to those who have taken over and carried the heat and burden of the day since. In those early days, I was assisted by Edward Llewellyn, Angus Cargill and Julian Lewis, under the direction of John Guthrie. In more recent times, the international office has been under the leadership of Richard Normington with my executive assistant, Sally Tipping, the international desk officer, Catherine Fall and Ingrid Ainley, who has run the department so well. I pay tribute to the person in my staff who has worked brilliantly with the Westminster Foundation for Democracy in the past few years, Jadranka Porter, who has been ably assisted by Abbey rosemont.
I thank all the agents in the party's organisation and the voluntary workers who have attended weekend conferences in this country and have visited central and eastern Europe to give their advice and support. At times, it has been hard work and, occasionally, it has been slightly hairy. I know that all concerned have found it to be a stimulating and uplifting experience.
The Westminster Foundation for Democracy was founded five years ago this month, and I pay tribute to my hon. Friend the Member for West Dorset (Sir J. Spicer), who has been the chairman since its inception and has led the organisation superbly. It was essential that we had a foundation in this country, as we were lagging behind our continental friends—particularly Germany—and we still do in terms of the scale of finance. But with no foundation on the Foreign Office vote, we had no means of funding the promotion of the cause of democracy on an all-party basis. We work on an all-party basis, and we are primarily interested in the development of democratic values. However, we like jam on both sides of our bread, and if we can have a centre-right Government in the country concerned, central office is particularly pleased.
I made my first visit to the region in April 1990, when I went to Prague in what was then still Czechoslovakia. In those days, even the lexicon had to be changed, as the word "party" meant the Communist party. One needed an "alliance" or a "front" or something of that nature. I made a mistake once when I was waiting with a group of Czech friends for a group of party activists from the UK to arrive at the hotel. I glanced at my watch and said, "Our agents will be here in 20 minutes," and I wondered why everyone had gone as white as a sheet.
In those days, parties tended to be driven by personalities. I remember returning to a hotel in Sofia with a colleague and seeing a heated argument on a street corner. I said to my colleague, "I am sure that that is another political party being formed." Sure enough, there were no fewer than 57 political parties at the Bulgarian election that year. Not only were there 57 parties, but


there were two electoral systems existing side by side—half the Parliament was elected by single transferable vote, and half by first past the post. The electorate were, let us say, less than completely sophisticated in such techniques.
At that time, anyone who was not a communist was virtually bound to be elected, and the people were united in one sense—they all had no previous experience of any form of government. When the history of the past five or six years is written, people will regard this as one of the most startling developments of the century. People with no previous experience were asked to manage the transition from a demand, centralised economy to a market economy. That is extremely difficult to achieve, and many failed to make a success of it.
In early 1991, there were centre-right Governments in Poland, Hungary, Lithuania, Czechoslovakia and Bulgaria. In Poland, I recall that there was no threshold in the proportional representation system, which meant that there were at least 20 parties in the Parliament. That caused chaos. In many ways, that was part of the thrill and excitement of democracy in those early, heady days.
In 1991, we had three contrasting experiences. The Czech Republic and Slovakia separated and, to their enormous credit, did so peacefully. We should contrast that with what happened in former Yugoslavia. Following the implosion of Yugoslavia, we were able to develop contacts with centre-right parties in Slovenia. Since then, we have attempted to create cautious relationships with other parties in other parts of former Yugoslavia.
The Soviet Union collapsed in the same year, and we had hardly finished digesting the arrival of democracy in the rest of central and eastern Europe before that happened. We then had the opportunity to visit countries such as Ukraine, Belarus and, particularly, the Baltic states. I remember going to the Parliament in Vilnius, where I zig-zagged through the anti-tank barriers outside the Parliament and went up the stairs past sandbags for a meeting with the Soviet military command. As a former Defence Minister, I never thought that I would see any of these countries at first hand, let alone find myself in a room talking to Soviet military commanders. It was a startling experience.
In early 1992, the Albanian elections were held. Albania had been crushed by 50 years of the most appalling dictatorship. At the time of the elections, I stood with Mr. Berisha in a football stadium where a crowd of 15,000 had gathered. It was noticeable that the country had intermittent food supplies, and many in the crowd that day had no knowledge of whether they would get food later that week. Certainly, the hotel had no hot water or heating of any sort. Yet the people were sustained and buoyed by the knowledge that they were at least going to be free. I will return to the tragic events in Albania later.
Six weeks after the Albanian election at the beginning of 1992, I was in my constituency and participating in the British general election. People complained to me about matters such as the frequency of the bus service or the fact that a bus stop had been moved. Before my eyes flashed the faces of people whom I had seen in Albania, but there was no point in upbraiding my constituents and saying, "You should have been in Tirana six weeks ago,"

because they would have been astonished had I done so. Nevertheless, my experience in Albania gave me a useful sense of perspective of what is important.
In the second wave of elections in central and eastern Europe, many of the former communists—almost all of whom had renamed themselves socialists—were returned to power. They knew that all they had to do was bide their time, because the electorates in almost all those countries had unreasonable expectations. I am not saying that some of those expectations had not been encouraged by fledgling politicians—it would not be the first time that that has happened—but many people in the region genuinely believed that they only had to exist to achieve the living standards they had seen on German television. Of course, life proved to be much harder than that, which led to considerable disillusionment. Only in the Czech Republic have the Government of Vaclav Klaus been able to hold on to power, and even Mr. Klaus lost his overall majority.
Many of the good people from central and eastern Europe whom we brought over for weekend gatherings in the United Kingdom were former Prime Ministers—we were in danger of having a former Prime Ministers' club—but at least they were learning the lessons of the democratic process. Those lessons were that they had to be properly organised, have policies that appealed to the electorate, and be united. So often, we found that, in certain countries, there were seven, eight or more parties that we in this country would recognise as centre-right, and all were vying for the same section of the vote. We are now witnessing what might be called the third wave. Centre-right parties, having lost elections and been forced out of office, went back to the grass roots, reorganised and proposed new policies. They have now won power in Lithuania, Bulgaria and Romania and have good prospects in Poland.
I want to speak briefly about events in Albania. Those events are tragic, especially in the light of what that country has already suffered. It is right that we should ask whether the European Union, through its various member states, has done enough for Albania since 1992; or whether it has been preoccupied with the intergovernmental conference and single currency, while on its doorstep a country has been suffering. It is no coincidence that the centre of much of the so-called rebel activity in the south of Albania is Vlore, because that is the well-recognised centre of mafia operations in that area and the mafia have been infuriated by the president's efforts to close down their operations.
The problems in Albania were set out extremely well in yesterday's Wall Street Journal leader, from which I shall quote. The leader talks about the Albanian Socialist party—another former communist party that has sought to dress itself in the socialist label—and states:
The ASP's plan is so good it could be a model for disgruntled Communists everywhere: You pull out of the election if opinion polls predict you are going to lose, complain that the country has become a one-party state, wait for a cause celebre, and then encourage criminal gangs and former Communist secret police and military leaders to take up arms against the government. The cause celebre in this case was the pyramid scheme wave that got out of control before the government quashed it.
The conclusion of the leader is:
If opposition groups don't immediately start working with Mr. Berisha to hold free elections in the coming months, and instead press for military gains, it will become clear that what they are aiming for is not democracy but a military coup. If that happens, will we still hear news reports that it is a popular uprising?


Not only is Albania suffering a tragedy, but events there are being misreported on a spectacular scale.
I conclude by saying that the opportunity that has been given to me to serve in this way and to work with so many of the new democrats of central and eastern Europe has resulted in a profoundly stimulating and memorable experience, for which I extremely grateful.

The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): I welcome the debate introduced today by my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie). I greatly regret the absence of any Opposition Members save one, and that of any other Conservative Members; however, that does not detract from the fact that this is an extremely important issue. It is right and proper that it should be debated in the House.
I shall deal with the specific points relating to Albania before turning to the more general issues of the debate-the welcome spread of democracy throughout central and eastern Europe. The position in Albania is, as my right hon. Friend said, extremely precarious and no one can predict the outcome of the current violence. It must be in the interests not only of all Albanians but of the international community that peace and law and order should be restored to Albania as soon as possible.
The Government profoundly welcome the agreement between President Berisha and the other political parties, particularly the Socialist party, to form an interim Government of national reconciliation, and the appointment of Bashkim Fino of the Socialist party as the new Prime Minister. As my right hon. Friend said, we sincerely hope that all democratic forces in Albania will now unite to restore peace and law and order and to ensure that the elections that are to take place next June fully comply with international standards and so create a new and legitimate democracy in that troubled country.
Albania is probably the last of the countries in which problems are likely to continue. We hope that Bosnia will settle down and that the other countries that have experienced instability between the ending of the Soviet dictatorships and the present day have all stabilised. I therefore trust that we will now see the progress towards democracy continue satisfactorily.
I add my congratulations to those already expressed by my right hon. Friend to the teams from the Westminster Foundation for Democracy and, indeed, Conservative central office who have greatly contributed to the creation of democratic systems in all the countries of central and eastern Europe and who have put enormous effort into that successful endeavour. The Westminster Foundation for Democracy is an all-party body, so I should pay tribute on a cross-party basis to that organisation.
The establishment of democracy in central Europe gives the United Kingdom a unique opportunity to expand our trade and political influence into that part of the world. I have been travelling through all the countries in the region over the past 20 months and I have been extremely impressed by the interest shown in doing business with the United Kingdom and our companies. Last week, I was in Latvia, where I met what I can honestly describe as the most enthusiastic team of British business men whom I have ever met on my travels. There are huge opportunities for British business, and the

Government are offering as much encouragement as we can. All the effort that we put into promoting business in that part of the world will pay great dividends for our national interests as well as for the companies that take advantage of the opportunities that we lay before them.
Trade is only one way in which democracy can be developed. We have put enormous effort into helping the Governments of each of those countries to establish proper systems. I pay special tribute to the work that is done by the know-how fund, the British Council and the Overseas Development Agency. All the countries of central and eastern Europe have been extremely active in promoting good government, education and, perhaps above all, the knowledge of the English language, which is essential if countries are to take advantage of international trading opportunities. Almost all international trade deals now have English as a principal language.
The European Union is the forum into which most of those countries wish to be brought. Ten of them in the central European group are already associate members of the European Union, and it is Her Majesty's Government's policy to encourage advances in those countries so that they can be brought fully into the European Union with minimal delay.
To that end, the know-how fund in particular is paying close attention to trying to bring the standards of those countries up to the standard that is demanded by the Commission. Specifically, it is helping them to answer the voluminous questions that they are being asked by the Commissioners so that an opinion on each of those countries may be published shortly after the intergovernmental conference. We shall then discover which of the countries fulfil the criteria, so that they can immediately start negotiations for full membership of the European Union.
We believe that the current state of affairs with the EU is only partly completed, and that we will not be content until the European Union fully represents all those European nations that wish to become members. I believe that progress is being made on that front, but two specific difficulties must be overcome.
The standard of the common agricultural policy must be adjusted to make it possible to bring in other central European countries, and the structural funds must be altered so that the countries that contribute to those funds do not find themselves ruined by the huge numbers of new entrants that are able to draw on them for support. In both cases, we are doing everything we can with our European partners to encourage the necessary alterations so that the EU is able and ready to bring in the new members that wish to join.
Similarly, the expansion of NATO will help to underpin democratic systems in central Europe and give countries that have not had a feeling of security in my lifetime confidence that they will no longer become the battlefields of the world. The expansion of NATO must be undertaken cautiously and in due time. It is a matter for NATO, and NATO members alone, to decide which countries should join their organisation, and when, but I am confident that the first entrants will be allowed in—or at least will be allowed to start the negotiations for entry and named—at or around the Madrid conference this summer. That will give hope to those nations, and to others who will be able to continue to benefit from the


prospect of membership, as the doors for NATO membership will be left open at that stage and we shall gradually expand the organisation in such a way as to secure the necessary peace for central Europe.
We must, however, be careful not to draw new cold war lines, so in the process of NATO expansion we must take fully into account Russia's legitimate concerns. I hope that we shall be able to conclude a charter between NATO and Russia at or about the same time as the Madrid conference. If we are able to do so, we shall defuse what might otherwise be a difficult situation. We have made it clear throughout that Russia cannot be allowed to veto the expansion of NATO although her legitimate concerns should be met.
We should also expand the role that Partnership for Peace, the Organisation for Security and Co-operation in Europe and the Council of Europe can play in ensuring the democratic freedoms of the peoples of central and eastern Europe, and enhance what is done in those forums to that end.
The results of the democratisation of central Europe will enormously benefit us all, not only in trade but in acting together to enhance the well-being of the citizens of all countries of Europe. The fight against international crime is one of the gravest difficulties confronting the international community. We are in grave danger from the flood of illegal drugs that is inundating the whole of Europe. Those drugs, depending on their type, come mostly from the far east or South America, but some are grown nearer to our shores, in the form of Ecstasy and other chemical drugs.
In all cases, we need a joint international effort if we are to defeat that appalling phenomenon of our time. The latest estimate that I read was that, last year, the profits of illegal drug dealing amounted to about US$500 billion—a much larger sum than most small countries' gross domestic product. With resources like that, no single country can take on the drug barons and expect to win; only if we unite in our efforts can we do so. The role of the central European countries in that effort will be crucial, and we are making tremendous efforts to combine our Customs and Excise and police efforts with those of emerging nations.

Mr. Ian McCartney: I apologise to the right hon. Gentleman for the fact that I was not present for the opening part of his speech.
Regarding the national effort to combat distribution of drugs, will the right hon. Gentleman bring to the Home Secretary's attention the fact that in our clubs and pubs there is now a major network of organised gangs in the

bouncer movement, which has led to a huge increase in the distribution and sale of drugs and is leading to the use of guns and all types of other weapons against innocent customers and the owners of those premises?
The Government need to impose proper regulation and remove from the security industry these gangsters, who are parading as business people as a front for distributing drugs and horrifically damaging our young people.

Sir Nicholas Bonsor: I share the hon. Gentleman's concern about that danger. I have no doubt that my right hon. and learned Friend the Home Secretary is addressing it. He is addressing a great many law and order issues, but he does not receive much support from Labour Members in his campaigns. I nevertheless welcome what the hon. Gentleman says and hope that, when we introduce legislation to solve that specific problem, it will not, unlike the rest of our anti-crime legislation, be opposed in the Division Lobby.
The efforts of the Home Office and the Foreign Office are closely co-ordinated and the House will know of the appointment of the drugs supremo, Mr. Derek Plumbly, who has taken on overall responsibility for a joint effort to crack down on the supply of drugs from abroad and their distribution. That new joint effort is having substantial results. The fact that we have captured a much greater quantity of drug supplies this year than ever before reflects an increase in our efficiency rather than an increase in the flow of drugs.
In summary, the emergence of democracy in central Europe gives us new and exciting opportunities. Our businesses there will flourish. I am glad to say that our bilateral relations with those countries are excellent. I have visited all of the central European and most of the eastern European countries while I have held my current job, and visited many of them when I was Chairman of the Defence Select Committee.
I believe that we are held in especially high esteem in central Europe. It is a pity that we do not often get more publicity in this country for the work that the Government and our independent agencies do and the effort that our business men make; obtaining any media coverage for those efforts appears to be an impossible task. It is very important that we in this country unite in our determination to support the democracies in central Europe. It is essential that we bring them in to western European organisations, and that we keep in the closest possible contact with them to ensure that there is no backsliding.
As to Bosnia and Albania, I believe that we must concentrate enormous international efforts to ensure that peace is maintained in the former Balkans so that we do not see a conflagration that could undo much of the good work that has been done.

H. H. Robertson (Pension Fund)

Mr. Andrew Miller: It was interesting to listen to a thoughtful speech about important world affairs by the Minister of State, Foreign and Commonwealth Office, the hon. Member for Upminster (Sir N. Bonsor). It shows the strength of the House that we can move immediately from an important debate on world affairs to a much more parochial issue that affects ordinary citizens in our constituencies.
In introducing the debate, I record my thanks to hon. Members on both sides of the House who have contributed to the enormous amount of information that I have gathered relating to the case. I pay tribute to the right hon. Member for Wirral, West (Mr. Hunt), the hon. Member for City of Chester (Mr. Brandreth), my hon. Friends the Members for Birkenhead (Mr. Field), for Wallasey (Ms Eagle), for Alyn and Deeside (Mr. Jones), and for Makerfield (Mr. McCartney), and to my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the deputy leader of the Labour party. My hon. Friend the Member for Wirral, South (Mr. Chapman) will not be able to participate in the debate as he has not yet made his maiden speech. Hopefully, he will catch your eye later today, Mr. Deputy Speaker.
H. H. Robertson has a long history in Ellesmere Port, having started its life as the Wolverhampton Iron Works more than 90 years ago. Some of the original workers walked along the Shropshire Union canal from Wolverhampton to Ellesmere Port to get their jobs. Today I shall concentrate on the activities of its two most recent parent companies, Robertson Ceco Inc. of the United States and the 1W Group, which took over on 1 January 1994.
On 23 January this year, it was announced that H. H. Robertson had sold to British Steel the intellectual property rights and plant associated with its only profitable product. As a result, the principal wage-earners of 150 families in the Ellesmere Port area will lose their jobs. In 1989, the then owners entered into a pension holiday. At that time, the fund had a surplus of £4.4 million, but by October 1992 there was a deficit of £2.4 million. However, it was not until Christmas eve 1991 that the consulting actuaries, Sedgwick Noble Lowndes, advised the managing director, Mr. Ian Wood, of the problem—that is the way that he described the situation to me.
However, for reasons yet to be explained, the pension holiday continued until April 1992. Therefore, my first series of questions is: what happened to the investment strategy during that period? When were the trustees first notified of the problem? Why, when the managing director knew of the seriousness of the problem, did contributions not recommence until April 1992? It seems to me that, irrespective of the difficulties that the company may have faced, there are some serious issues surrounding the management of the pension fund at that time.
I now move to 1994 when the 1W Group took control. One of its first actions was to reach an agreement with the workforce about a 10 per cent. pay cut-that is a real contribution by any workforce to a company's well-being. A slow process of repaying pension fund moneys was put in place, and large-scale redundancies occurred. It is alleged that pension fund moneys were used to boost redundancy payments at that time. It is now obviously

impossible to prove that one way or the other from the enormous pile of information that I have gathered. However, it raises the question whether the fund should have been used in that manner, irrespective of the discretionary powers held by the trustees, while it was in deficit. The fund was clearly in deficit from some point after 1989 throughout the time in question.
I now bring the House to the present. When I was told about the proposed closure and an apparent £5.3 million sale to British Steel, I began an investigation into the company and its parent group. I shall briefly describe the structure of the company. H. H. Robertson is owned by the 1W Group whose managing director is Mr. Ric Wharton. In turn, that company is owned by Midmar Investments Ltd, which Mr. Wharton describes as a trust in the name of his children. The 1W Group owns, or has a shareholding in, a string of other companies. Mr. Wharton is, or has been, a director of about 28 companies, some of which are in liquidation, some of which have failed to file their accounts in the normal time, and some of which appear to be not trading. At the time of the H. H. Robertson acquisition, there was a significant share issue in the 1W Group. I draw to the Minister's attention the fact that, if H. H. Robertson is sold at a negative value, presumably those shares will be worthless.
The structure that I have described so far is complex, but not unusual. I then discovered that the deal with British Steel was not for the figure that I was first told, but for £7.4 million, and that it also involved a company called Chester Plant and Leasing Ltd. The plant that British Steel was interested in was leased to H. H. Robertson by Chester Plant and Leasing Ltd. There is nothing terribly unusual about that: people lease all sorts of business needs, from photocopiers to buildings. However, it is a little odd to lease plant that is at the core of the business.
I also discovered that Chester Plant and Leasing is owned by H. H. Robertson, and that the directors of the company are Mr. Wood, the managing director of H. H. Robertson, and Mr. Wharton, the owner of the parent company. It also appears to have a mysterious offshoot known as Gardenia Holdings, which is registered in the Bahamas. Mr. Wood has so far denied knowledge of Chester Plant and Leasing and of Gardenia Holdings, although he is a director of the first company.
Any reasonable person examining the structure that I have described would ask whether the directors are in breach of their fiduciary duties. It is clearly impossible to answer that question without accessing the management accounts of all the companies—even then, it would not be easy. I wrote to Mr. Wood on 5 March, asking him a series of questions and pointing out that I had secured this Adjournment debate. I asked him about Gardenia Holdings, Chester Plant and Leasing Ltd and the exact date of the takeover—which I have since discovered. I also requested any information that he had about various financial issues. Thus far, he has chosen not to reply.
The third and final complication arises from H. H. Robertson's attempt allegedly to protect creditors. The firm has transferred all the remaining assets, including land and buildings, to another company called Ledge 313 Ltd., which was incorporated in Scotland on 17 December 1996. Mr. Wood told me a fortnight ago that that was done in the best interests of the creditors, especially the pension fund. However, Ledge 313—whose particulars I have received thanks to the good offices of


Mr. Ross Ramsey of Companies House in Scotland, who has been extremely helpful—appears to have three charges associated with it: in the names of the Bank of Scotland, Chester Plant and Leasing, and Gardenia Holdings.
Mr. Wood has meanwhile been trying to argue that, if the borough council gave him planning consent to build a supermarket, there would be enough money to pay all the creditors, including the pension fund. As every hon. Member knows, a local authority could not unilaterally grant consent, even if that would help the pension fund. The authority must base its decisions on planning grounds alone. However, a planning application was lodged on 18 February 1997.
Even if that application went ahead on the most favourable terms, how—given the charges on Ledge 313—can the pension fund be protected? Why was the pension fund—H. H. Robertson Pension Trust Ltd.—not listed as having a charge on that company, bearing in mind that Mr. Wood told me specifically that the company was created to help the creditors, particularly the pension fund?
I have always argued that the Pensions Act 1995 would not stop another Maxwell. Whether this case falls into that category, one cannot be certain.

Mr. David Hunt: I thank the hon. Gentleman for kindly agreeing that I might intervene. I share his concern about the rights of the pensioners. Their position is stressed by a letter sent to me by one of my constituents, who writes that the trustees met on 3 March, and that Mr. Wood has since given notice to members of the pension plan that the plan is to be wound up and that trustees will be advising members direct. No advice has been given and no pensions surgeries have been held, so everyone is in a state of uncertainty. I entirely agree with the hon. Gentleman that we must know the truth as quickly as possible, so that we can tell our constituents.

Mr. Miller: I am grateful to the right hon. Gentleman for that helpful intervention. According to the latest information given to the trustees by professional advisers, the fund is underfunded in excess of 50 per cent.—in other words, it is forty-something per cent. funded.
A friend of mine, Councillor Brian Jones, works at H. H. Robertson. If he took his pension at the point of his dismissal, bearing in mind that he has only about six years to go and that he would have to take a reduction because of taking his pension early, which he may have to do in the circumstances, he would receive a pension of about 14 per cent. of the amount that he has paid for. That is appalling.

Ms Angela Eagle: My hon. Friend will know that I also have constituents who are in that situation. Will he comment on the activities not only of the firm in relation to the pension fund, which seems to have been raided, but of those whose duty it is to protect pension funds? Clearly, something odd was going on that led to the emptying of the pension fund as the firm was getting into difficulties. Does not he think that those charged with looking after deferred earnings should have done a better job?

Mr. Miller: Indeed. Serious questions must be raised about the activities of the trustee, the professional advisers and the investment company from 1989 until 1994, or possibly 1995 or even up to the present day. The situation is complicated because there has been a change of personnel over time with the change of ownership of the company, but there must have been a point when it was known that the fund had dipped into deficit. At that time, surely it must have been the duty of the professional advisers, the directors of the company and the trustee to reinstate the funding of the scheme. That did not take place. My hon. Friend makes an important point, which should be the subject of investigation.

Mr. Frank Field: I thank my hon. Friend for the work that he has done on the matter, which affects not only his constituents but, as my hon. Friend the Member for Wallasey (Ms Eagle) said, people throughout Wirral, Chester and Merseyside. As well as looking at the past, important as that is, it is also important to look to the future. This is the first such tragedy to come to notice as the Pensions Act 1995 takes effect. Will not the occupational pensions advisory service—OPAS—and the pension ombudsman be in the spotlight as people watch how effectively they carry out their functions? Sadly, this may not be the only case that will come to our attention in the next five years.

Mr. Miller: That, too, is an extremely important observation. We do not yet know how the new Act will work. The fund was conveniently wound up just before relevant parts of the Act come into effect. There may have been good advice; I do not know. However, even if the trustee took bad advice, made bad decisions or acted improperly during the period in question, where on earth will the money come from to refund the people who have been so poorly treated? It can only be from within the structure of companies that I have described.
The company structure is convoluted. There is a possible theme suggesting that Chester Plant and Leasing, with its offshore shoot Gardenia Holdings registered in the Bahamas, may be an important area of investigation, especially as those two companies hold a charge over the company that has allegedly been set up to protect the staff, including the pension fund.
I agree with my hon. Friend that the matter will highlight important new functions of the pensions ombudsman and OPAS, but we must also get to the bottom of the company structure, or we will simply be taking academic steps in relation to individual trustees who might lose their house, but that would not solve a funding problem of the scale that I have described.
I have always argued that the Pensions Act 1995 would not stop another Maxwell. Whether this case falls into that category, one cannot be certain. It is certain, however, that 150 families in constituencies of hon. Members on both sides of the House, and many other creditors, including to a considerable extent the Department for Education and Employment, will have to wait a very long time to recover anything from such a sorry state of affairs.
I have spoken to the Minister about this important matter. I know that he is sympathetic to the plight of my constituents and other creditors, and I appreciate the time that he has already given me on the matter. I ask him, however, to take action urgently—action that includes asking the DTI inspection branch to investigate immediately the matters that I have raised. I shall make all the documents that I have received available to him, and I shall co-operate fully with the investigation.
The House has a duty to help my constituents, and the neighbouring constituents of hon. Members on both sides of the House. I should like the Minister to respond with a strong message of hope for the 150 families who face an awful plight.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): I congratulate the hon. Member for Ellesmere Port and Neston (Mr. Miller) on securing the debate, and on the considered way in which he and others have raised questions that concern us all. I acknowledge the presence of, not least, my hon. Friend the Member for City of Chester (Mr. Brandreth), who—like our new colleague, the hon. Member for Wirral, South (Mr. Chapman)—cannot speak in the debate, for his own proper reasons. I also acknowledge the presence of the hon. Member for Alyn and Deeside (Mr. Jones), who has just joined us.
I share the concern that has been expressed about the security of pension funds, which is important to the Government and, indeed, to all of us; but I must utter a word of caution. This is a discipline that, perhaps, binds me more than anyone else in the Chamber, but the company that is the subject of today's debate is not, to my knowledge, in any form of insolvency, and we must hope that nothing that we say here will damage its prospects.
The hon. Member for Ellesmere Port and Neston has discussed his anxieties with me at some length. Although I may have to be somewhat circumspect, I shall introduce him to my appropriate officials immediately after the debate—in nine minutes' time. We spent more than half an hour together last night. The hon. Gentleman is necessarily more informed than I am at this stage, but I shall catch up, in the spirit of sympathy that he invited me to adopt for his and other hon. Members' constituents.
I note that only eight minutes remain. Let no one doubt that I am limited in what I can say in that time. My reply to the debate is not an end to the matter, and the hon. Gentleman's raising of the matter constitutes the beginning of what I shall endeavour to do. If time does not allow me to deal with all the issues, I wish to leave the House in no doubt about my attitude.
A range of protections already exist in pensions legislation and trust law, on which most pension schemes are based. All trustees have a duty to ensure that schemes are run properly, and to act in the interest of members at all times. Whether, and to what extent, pension funds can be used to provide early retirement benefits will depend on the rules of particular schemes, and on the powers of trustees to make such awards; but I repeat that trustees have a duty to protect all members' rights. That point was raised by the hon. Member for Wallasey (Ms Eagle).
According to our information, although there was a deficit in the Robertson scheme three years ago, recovery was made within six months. The latest solvency statements about the Robertson pension scheme put to the Department of Social Security in respect of its contracted-out status show no evidence of underfunding.

Mr. Miller: Will the Minister give the exact dates of those statements?

Mr. Taylor: I hope that there is enough good faith between the hon. Gentleman and me for him to accept that I will clarify that for him behind the Chair after the debate. He should, of course, feel free to share the information that I give him with other participants in the debate.
Trustees can make investments of any kind, but cannot normally invest more than 5 per cent. of a scheme's assets in the sponsoring employer or associated companies. That restriction substantially reduces the risk of loss should the employer become insolvent; but, if the employer does become insolvent, a trustee must be appointed who is entirely independent of the employer and any associated companies. The independent trustee is responsible for looking after the resources of a final salary scheme, and for protecting the interests of members. If there is a shortfall of assets in the fund, the deficit becomes a debt due from the employer to the trustees. It is the trustees' responsibility to pursue such a debt.
The protections to which I have referred are about to be strengthened. Important new measures, stemming from the Pensions Act 1995, will come into effect on 6 April. All those measures are geared towards safeguarding the security of pension funds and protecting members' rights. We must accept that the Act cannot be seen as an absolute guarantee that there could never be another Maxwell—as the hon. Gentleman pointed out—but it will introduce clear duties relating to the procedures that trustees must follow, and the controls that they must implement. That will increase trustees' vigilance in ensuring that pension schemes are properly administered and protected, and adequately funded.

Mr. Frank Field: One of the crucial new checks will be the solvency requirement. In other words, pension schemes must have funds so that, whenever they are closed, they can afford to buy annuities. It was said at the time that it would have been better for the industry to have an insurance scheme, so that when such cases arose the whole industry would ensure that those who had paid into pension funds received their pensions. Sadly, the solvency requirement does not have such an effect.

Mr. Taylor: The hon. Gentleman is an acknowledged parliamentary expert on pensions, and I note his opinion with appropriate respect. I do not think, however, that he wants me to reopen that previous debate; he wanted to put a point to me, and I take it in that spirit.
There will be stricter rules on record-keeping, and the separation of pension scheme bank accounts from those of the company. Let me give a specific example: trustees will be required to set up and monitor a formal schedule of contributions due from the employer, and an amount that the employer fails to pay into the scheme by the due date will become a debt due to the trustees. Trustees will


be expected to pursue that debt immediately, and will be required to make a report to the pensions regulator. New rules will be introduced to specify a minimum level of funds that schemes must hold to meet their liabilities, and the restriction on employer-related investment will be tightened.

Mr. Ian McCartney: In the investigation that could be held under the Pensions Act, could the actuaries themselves be investigated for professional misconduct, given their potential role in failing to act appropriately to defend the pension fund?

Mr. Taylor: It would be a great mistake for me to prejudge the outcome or outcomes, or the action or lack of action, that may flow from my officials' consideration of the evidence that they will be given by the hon. Member for Ellesmere Port and Neston. I hope that the House will understand that I cannot make a judgment from the Dispatch Box.
The hon. Gentleman has called for my Department to undertake an inspection. As he and the hon. Member for Makerfield (Mr. McCartney) know, the DTI has a range of powers at its disposal; but, as I have said, I will not make any prejudgment.
I will ask the investigation and enforcement directorate in my Department to consider the comments that have been made during today's debate. Should the hon. Gentleman have further evidence to support his call for an investigation, I invite him to send it to me, and I will refer it to the directorate for further consideration. He has said that he has substantial information at his disposal that he will give to me. However, I do not wish to prejudge the matter, and accordingly repeat my invitation to the hon. Gentleman and to other hon. Members to send me whatever evidence they have for proper consideration by my officials.
As my time draws to a conclusion, I invite the hon. Gentleman to accompany me—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time is up.

National Lottery

Mr. Tim Renton (Mid-Sussex): I am delighted to have won the Speaker's lottery and to have secured the debate today on the national lottery. It will be the last Adjournment debate that I have in the House, and I am particularly pleased to have won it, because today is the birthday of my right hon. Friend the Secretary of State for National Heritage, who has done so much to advance the cause of the national lottery.
It was Santayana who said that there is no cure for birth and death save to enjoy the interval. One of the remarkable things about the national lottery legislation is that it has the specific purpose of increasing our enjoyment of life. Playing the lottery, we can all become—for a few seconds—dream millionaires. At that moment just before 8 o'clock when the balls are turning in that great wheel and before the first one comes out, we can all think about swimming pools, jacuzzis and holidays in the Caribbean. Perhaps just a few minutes later, after the bonus ball has come out, we are back to reality again—worrying about supper, the children, the mortgage, and so on—but for those few seconds we have had the thrill of a taste of champagne, perhaps, and that adds to the sparkle of life for most families in Britain today.
As we all know, the lottery has a very serious purpose as well: to raise money for good causes, which previously received little or nothing from the public sector. In that regard, it has been a howling success. There are no other words for it. It has greatly exceeded expectations. When I was Minister for the Arts and first pressed for the lottery, we talked about a possible turnover of £2 billion to £3 billion a year. In fact that has rapidly gone up to £5 billion or £6 billion a year.
It is commonplace to think of ourselves as a nation of grumblers. I often think that the Germans are worriers, that the French are optimists and that we love to carp and grumble, but it is impossible, other than on a few small specifics, to grumble about the lottery. It is transforming the face of Britain. Galleries, museums, libraries, sports tracks, football grounds, forests, churches, village halls are all being rebuilt, renewed, restored. So far, £3 billion has been committed to more than 19,000 projects.
It is fair to say that what the Medicis did for Florence and Napoleon did for Paris, the lottery is doing for Great Britain. I pay particular tribute to my right hon. Friend the Secretary of State for National Heritage and to my right hon. Friend the Member for the City of London and Westminster, South (Mr. Brooke) for their tremendous commitment to getting the lottery on the road and ensuring its success.
It was not my intention today just to follow John Betjeman's words:


"Sing on, with hymns uproarious,
Ye humble and aloof,
Look up! and oh how glorious
He has restored the roof!"

It was my intention to talk rather more about the future of the national lottery and what might—and should—happen to it in the next five years, extending through the millennium.
In that time, inevitably, funding will largely move away from buildings and capital projects to current expenditure—particularly, for example, helping with the training and tuition fees of talented individuals: artists, sportsmen, dancers, potential Albert Finneys and Margot Fonteyns. The Arts Council's announcement last week that it would make lottery money available short term for 4,000 students in drama and dance who will start their courses in autumn 1997–98 was clearly part and parcel of that new development, that new dedication of lottery money.
I wholeheartedly applaud all of that. That is the right direction in which grant-giving bodies have to move, but I see dangers in it, the first of which—I am sure that my hon. Friend the Minister will not object to my saying this—is the increasing likelihood, as the lottery gets a little older and we become more accustomed to it, of Ministers tending, subtly and delicately, to try to override the grant-giving bodies and to back their own pet projects. It follows that the principle of additionality may be put at risk.
The House will remember that it was very much on the principle of additionality that the lottery legislation went through the House—that money raised by the lottery should be additional to the Treasury's commitment to public expenditure, for example, to the Arts Council. Preserving that principle is of absolute importance to the lottery, just as it is in the minds of those who buy their tickets every week: it is the basic principle on which the lottery was started.
Let us consider the terrible possibility—the unlikely possibility—of Labour winning the next election. We have already been threatened with a windfall tax, and I gather that there is a possibility that the windfall tax might be required to raise not £3 billion but as much as £10 billion. The first windfall that would be easily available to a Labour Secretary of State for National Heritage would, of course, be the £1.5 billion that goes to good causes: it would be all too easy to try to grab that and push it into a favourite project.

Mr. William O'Brien: When the right hon. Gentleman talks about additionality, will he bear in mind the charities that have suffered a loss of income as a result of the introduction of the national lottery? The additionality to which he refers does not apply to community charities, which are suffering. Will he address that point, as it is a significant factor?

Mr. Renton: I intend to address that specific point, because it is one area in relation to the grant-giving bodies that worries me, as it does the hon. Gentleman.
There is no firm, foolproof solution to the dangers, but if I may offer advice to those who are on the Front Bench after the election, when I shall have left the House, I would strongly counsel my right hon. Friend, who I very much hope will be in her post as Secretary of State for National Heritage, to agree a firm budget with the Treasury for a full five-year period, covering museums, galleries, the national heritage memorial fund, the Sports Council and the Arts Council, and to announce publicly the amount of Treasury funding. The Treasury should be tied to those figures. Then, if lottery money goes into an area where there is an overlap with grant in aid, such as tuition fees and training for students, that will not be able

to reduce the Treasury element of funding, because the Treasury will be committed to firm figures that were publicly announced.
It is worth remembering that a 12 per cent. tax on the total lottery turnover goes to the Treasury—£600 million per year on a turnover of £5 billion. It is a voluntary tax, so if the lottery became unpopular for any reason, or were seen as a substitute for public expenditure which people properly expect the Government to provide, sales could fall off and that £600 million might disappear overnight.
My other advice is to the grant-giving bodies. They should form themselves into a consortium or an informal council at chairman and chief executive level, so as to work together and develop a common approach to the sponsoring Minister and to the Chief Secretary to the Treasury, which would prevent their being picked off one by one by the Treasury in tight public expenditure rounds.
I agree with the hon. Member for Normanton (Mr. O'Brien) that the position of charities should be reconsidered. Although the work of the Charities Aid Foundation shows that the income of the 500 largest charities continues to grow, albeit at a much slower pace than before, it is clear that smaller, community charities are suffering. They depend not on planned giving and covenants, but on raffles and on rattling boxes outside supermarkets on Saturday mornings.
Figures given to me by the National Council for Voluntary Organisations suggest that the total loss to charities was about £350 million in 1995, which is rather more than the £300 million that they received from the lottery. One possibility is that, as the millennium fund expires, some of that share of the lottery should be diverted to the National Lottery Charities Board. I am sure that the Minister will agree that that aspect requires further thought.
I am opposed to the mid-week draw, because it detracts from the Saturday draw. I regret the position of some newsagents and tobacconists. There may be two of them in a village, one with a national lottery machine and the other without. The one that does not have a machine can stand his turnover falling by 20 per cent. on Friday or Saturday because of the lottery, but if it were also to fall by 20 per cent. on Tuesday or Wednesday, he would be driven out of business. I have raised such cases with Camelot, which says that it has sufficient outlets and does not require any more. That is one of the dangers of the second lottery draw. There is also the danger of Camelot appearing too greedy, and it should be wary of that.
There is talk of keno—a sort of electronic perpetual bingo—being introduced. I played it at the Taj Mahal casino in Atlantic City and it is horribly addictive: all the dollars in my wallet were removed very quickly. I hope that Camelot will not introduce it in the United Kingdom.
On the other side of the coin is the 49s, which is being introduced by bookies and betting shops. At fixed odds, one can bet on three up, five up or the bonus ball. It presents a serious threat to the lottery as the bookies do not pay anything to good causes and do not give anything to charities. There is talk of £1 billion being knocked off the national lottery turnover if the 49s is not examined and perhaps stopped. The legislation needs clarification. No skill is required to play the 49s: it is clearly a lottery and seems to fall foul of the gaming legislation. I hope that the confusion between lottery and gaming legislation will be clarified.
Finally, I come appropriately to the millennium, which is now just over 1,000 days away. It should be a time for celebration, change and a new start. It is easy to carp about it and to ask why money is being spent on redoing the Greenwich peninsula, but that is the wrong approach. It is much more important for us and our constituents to have a positive attitude with a view to participating in local planning and enjoying the national celebrations.
I salute my right hon. Friend the Secretary of State for her work in this area. In a recent lecture, she referred to the 11th century monk who wrote that the period immediately after the year 1000 saw the world clothing itself in a mantle of white churches. What a lovely epigram. What a lovely thought. I hope that out of the millennium celebrations Britain will clothe itself in a mantle of new and exciting buildings that will reflect this century and, like the museums at South Kensington, will be admired and used throughout the next century. If that happens, all of us who have been involved in the lottery—as I have been since I was Minister responsible for the arts—may remember with some justification Sir Christopher Wren's epitaph in St. Paul's cathedral: "If you seek his monument, look around you."

The Minister of State, Department of National Heritage (Mr. Iain Sproat): I am grateful to my right hon. Friend the Member for Mid-Sussex (Mr. Renton) for initiating this debate on a subject that the House seems particularly and rightly fond of discussing. I know that he has a great interest in the lottery, having been involved in its introduction at an early stage.
The lottery has been enormously or, as my right hon. Friend would say, howlingly successful in its own terms, with sales far greater than anyone predicted when its licence was awarded, and awards more widespread and larger than anyone could have dreamed of. Total sales are fast approaching £11 billion, and an independent study by Terri la Fleur, a leading world lottery expert, has shown that the United Kingdom lottery is the most successful and efficient in the world. The mid-week draw, which was launched on 5 February, is building on that success.
As I have already mentioned, the lottery has been a huge success measured by the amount that it has raised for good causes. To date, a total of £3.1 billion has been raised for sport, the arts, charities, heritage and the millennium, with the distributing bodies making awards to more than 19,000 projects. The availability of such money for those sectors in such a short time is nothing short of a revolution, and it has been instrumental in many of the great advances made in the Department of National Heritage's areas of responsibility in the past almost five years.
It is also worth commenting on the way in which the lottery has already become a part of everyday national life. Camelot estimates that 65 per cent. of the adult population regularly play the lottery, and that around 90 per cent. have played at some time.
I am grateful to my right hon. Friend for his comments about the relationship between lottery money and existing public expenditure. The Government have made it clear that the money raised by the lottery for good causes was—

and is—intended to be additional to public expenditure. The Government will not reduce public spending programmes to take account of awards from the lottery.
That commitment does not mean that the Government can or will give automatic protection to programmes that are able to benefit from lottery funds: what we can afford to spend on such programmes will be decided in exactly the same way as we decide on other programmes not eligible for lottery funding. It would be absurd to give automatic protection to lottery-supported programmes when that protection is not available for other programmes.
No deal with the Treasury of the type interestingly proposed by my right hon. Friend is likely to be appropriate, even if it were possible to commit future Governments in advance. Whatever the affordable level of any given public expenditure programme, lottery funds are available to add to it—including projects similar to those which might once have fallen within that programme.
That approach is a sensible means of ensuring that with the public funds available—of which the lottery is a part—the real objectives for supporting the heritage, the arts, sport and charities are met. It follows that areas such as the national health service and education, which are clearly major continuing responsibilities of the Government, should be funded from public expenditure voted each year by Parliament, and should not rely on the public's propensity or otherwise to buy lottery tickets.
My right hon. Friend the Member for Mid-Sussex is also worried that Ministers might try to ensure that lottery funding goes to projects that they favour. It was precisely to prevent such interference that the Government appointed the 11 lottery distributing bodies to take all specific funding decisions independently of the Government. My Department has also issued guidance to other Ministers and Departments explaining the part that they may or may not play in supporting lottery applications. I can assure my right hon. Friend that both we and the distributing bodies maintain a close watch to ensure that those rules are not broken.
My right hon. Friend the Member for Mid-Sussex is also concerned about the introduction of the mid-week draw. Under the terms of the National Lottery etc. Act 1993, the licensing of the draw was a matter for the Director General of the National Lottery, not the Government. My right hon. Friend the Secretary of State emphasised, however, that the director general must ensure that the decision is compatible with the provisions set out in section 4 of the National Lottery etc. Act, which require the director general to exercise his functions in the manner that he considers most likely to ensure that the national lottery is run with all due propriety, that the interests of participants in the lottery are protected and, subject to those overriding considerations, that the revenue to the good causes is maximised.
The director general judged that the introduction of a mid-week draw was consistent with those duties, and allowed the licence to be changed accordingly. However, I take the point made by my right hon. Friend the Member for Mid—Sussex about the two newsagents: it is a very difficult point to deal with and one that the Government should be aware of. The director general, especially, might consider it again with some rigour.
I cannot emphasise enough that the protection of players is the uppermost requirement in the mind of my right hon. Friend the Secretary of State. My Department and the director general will monitor carefully the effect of the mid-week lottery to ensure that the interests of participants are not being undermined and that the players continue to receive the level of protection which Parliament intended when the Act was passed.
Perhaps the most important aspect of the new mid-week game, and one which has not been considered sufficiently—not by my right hon. Friend the Member for Mid-Sussex, but by others less well informed outside the House—is the effect that it will have on the amount raised for good causes. Hon Members may be aware that sales of lottery tickets have been decreasing slightly in recent months. Experience in other countries suggests that the introduction of a mid-week draw is likely to halt that decline and increase the turnover of the draw game by about 20 to 30 per cent.—from about £70 million to between £85 million and £90 million per week—and is therefore likely to push the lottery's turnover back to its peak level of about £5.5 billion per year.
Sales to date have borne out that prediction with an overall increase in sales for the on-line game of 30 per cent, representing an increase of 30 per cent. in the amount raised for good causes. It should be remembered, however, that Camelot held super-draws with an increased jackpot for the first four of the five mid-week draws to date, and that the mid-week draws' true impact on overall sales will not be clear for some weeks.
I note the concerns of my right hon. Friend about the introduction of a keno game and his interesting anecdote about it stripping his pockets of his money. The Government and the director general have already made their views clear about keno. Although it would be for the director general to consider any application to run keno-style games, no such application has been made. I should make it clear that we view keno as at the harder end of the gambling spectrum and therefore not appropriate as part of the national lottery.
My right hon. Friend the Member for Mid-Sussex also expressed concerns about betting shops taking bets on lotteries. I am sure that he is aware that the National Lottery etc. Act specifically prohibited bookmakers from taking bets on the national lottery, and despite some pressure from the industry the Government have not changed their view. Bookmakers are, however, taking bets on the Irish national lottery and their own new 49s game. Although we are keen to ensure that the national lottery is not associated with what we view as a harder form of gambling, regulation of the bookmaking industry is a matter for my right hon. and learned Friend the Home Secretary, who I understand is content with the developments. I shall, however, draw his attention to the concerns of my right hon. Friend the Member for Mid—Sussex.

Mr. Renton: I think that it is right to say that the matter of the 49s is up for judicial review at the moment and therefore being actively considered. There clearly seems to be some confusion, some overlap, between gaming and betting law.

Mr. Sproat: That is certainly an argument.
The primary aim of the lottery is of course to raise money for good causes. A successful lottery bid brings a number of benefits for communities, including, for example, regeneration, job creation, new opportunities for businesses and tourism, and new and improved cultural and sporting facilities. We want to ensure that everyone derives reasonable benefits from the opportunities that the lottery has brought about.
Alongside the flagship projects, smaller awards are the quiet lottery success story, as the reader of any local newspaper can testify. More than 74 per cent. of awards announced to date have been for less than £100,000. Lottery funds are having a real impact on the lives of everyone right across the country. However, the Government are aware that some areas of the country are still not doing well enough from the lottery, and to that end shall shortly be launching a new information leaflet to guide those interested in making an application for lottery funding. We shall also be encouraging local business men and those from the professions to offer their services to groups who are not familiar with grant systems.

Mr. William O'Brien: I am grateful for the Minister's comment, because my constituency is one of the few that have received very little lottery funding. I believe that we are third or fourth from the bottom of the list. I hope that it will not be too long before the information is circulated so that my constituents and organisations in my constituency—I referred to the problems with smaller charities—will be able to take up the offer of improved distribution of lottery resources.

Mr. Sproat: The hon. Gentleman has taken a long and admirable interest in the matter and, indeed, in the effect on charities. I will try to remember to send him a special copy of the leaflet. If he wishes, we could discuss how best to ensure that those who can benefit from the advice therein can be helped by him to make their applications so that his area gets its fair share of lottery awards.
In its first two and a half years of operation, the lottery has already made a remarkable difference to the capital infrastructure of good cause areas. Nevertheless, my Department is continuously reviewing the way in which the lottery works so as to achieve the best effect. After only approximately two years since the first awards were made, my right hon. Friend the Secretary of State has issued new policy directions to allow sports councils, arts councils and the heritage lottery fund greater flexibility in what they fund.
The sports councils have already launched revenue schemes under those new directions, which will provide support for our most talented athletes and attract and stage major international events in the United Kingdom. Further programmes to be announced later this year will provide community sports coaches and assist in identifying and developing talent in schools and sports clubs.
The arts councils have also launched revenue programmes under the new directions. The Arts Council of England has launched a two-stream revenue programme, "Arts For Everyone", aimed at established arts organisations—professional and amateur, youth or voluntary groups—putting together their first creative project, and at small professional arts organisations.
My right hon. Friend the Member for Mid-Sussex will be interested to know that the first arts revenue awards under the new directions were announced today by the Arts Council of Wales. They include grants of £5,000 to the Abergavenny arts festival towards the running costs of a small literature festival and workshops for teenagers and £1,758 to Llandysul primary school—I apologise to the Welsh for not, I dare say, pronouncing that properly—to stage the musical show "Joseph and His Amazing Technicolor Dreamcoat" in Welsh.
On 8 August 1996, my right hon. Friend the Secretary of State issued another new direction to the Arts Council of England, allowing it to fund a stabilisation programme for arts organisations. The purpose of the programme is to help arts organisations to gain long-term financial

viability and to improve and secure management skills in those organisations. The programme will help organisations to consider and perhaps change their mission and the markets in which they operate, to inject new skills to help to achieve that mission, to provide balance sheet stability, and to deliver better value for money. The first successful applicants under the pilot stabilisation programme were announced in January.
The National Heritage Act 1997 will enable the heritage lottery fund to support a wider range of projects to provide greater public access to our heritage, support for education and youth-oriented projects and for information technology initiatives, and to preserve—

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Sri Lanka

Mr. Battle: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current political situation in Sri Lanka. [18294]

Mr. Gerrard: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the current situation in Sri Lanka; and if he will make a statement. [18303]

The Parliamentary Under—Secretary of State for Foreign and Commonwealth Affairs (Dr. Liam Fox): We believe that the tragic ethnic conflict in Sri Lanka can be resolved only through peaceful negotiation. We continue to support the Sri Lankan Government's efforts to find a solution and we have called on the Government and the Liberation Tigers of Tamil Eelam to reach a negotiated settlement.

Mr. Battle: In view of the continuing and escalating oppression of the Tamil people, particularly in the Jaffna province, may I urge the Minister to suggest to the United Nations that, in seeking a peaceful resolution to the conflict, it involves the world solidarity forum for justice and peace in Sri Lanka, which seeks to give a hearing to, among others, the more moderate Tamil voice in Sri Lanka. The forum is a well-respected body with international support. It is supported in my constituency by the Bishop and diocese of Ripon, who have had a long-standing relationship with Sri Lanka and are anxious that urgent action be taken to resolve this conflict and to achieve a peaceful resolution.

Dr. Fox: The situation in Sri Lanka is complex, but the political parties there, which already cover a wide spectrum of Sri Lankan society, are increasingly aware of the need for a negotiated settlement. To that end, it is important that they achieve in the first instance a negotiated devolution package, which they are working on at present. The House will no doubt wish all politicians in Sri Lanka well on that matter.

Mr. Gerrard: I welcome what the Minister has said, but he obviously appreciates that there is still a civil war in Sri Lanka and that Tamils from the north of the country particularly are trapped, effectively, between two warring armies and have no internal route of escape. He has said that the British Government are calling on both sides in the conflict to negotiate a settlement. Does he agree that there may potentially be a role for the British Government to do more than simply call for a settlement, and that, if the opportunity arose, the Government would be prepared to facilitate—and, if necessary, even mediate in—reaching a settlement, while accepting that, obviously, we cannot possibly impose a settlement from outside the country?

Dr. Fox: It is self-evident that the UK would neither be able nor would wish to impose any settlement on another democratic Commonwealth member. There are two parts

to the hon. Gentleman's question. The first relates to the civilians and, of course, we remain concerned about the impact of the fighting on the civilian population in the north, particularly displaced persons in the Vani. We have impressed on the Sri Lankan Government the need to get humanitarian supplies through to those people. We are extremely impressed by the willingness of the Sri Lankan Government to do so.
On mediation and facilitation, we have always made it clear that our good offices are there should two parties in any dispute seek to use them, but both parties would need to do so and, at present. there is no sign that that will happen.

Romania

Mr. Flynn: To ask the Secretary of State for Foreign and Commonwealth Affairs what new proposals he has to improve relations between the United Kingdom and Romania. [18295]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): We are very keen to build on our excellent relations with Romania, which I recently visited. We have offered every assistance to the Romanian Government's ambitious reform programme. Later this week, my hon. Friend the Minister of State, Foreign and Commonwealth Office, the hon. Member for Upminster (Sir N. Bonsor) plans to lead a trade mission there.

Mr. Flynn: Is the Secretary of State aware of the grave danger in the well-meaning donations of drugs to Romania by almost 700 charities in the United Kingdom? Has he heard that more than 60 children were killed in Haiti this year by a contaminated type of paracetamol which was donated by a major country? That incident is similar to one that occurred in Nigeria, in 1991, in which 100 children were killed. Has he read about the tragedy in Lithuania in which seven pregnant women were blinded by a drug intended for animal use, because they could not read the instructions, which were in English?
Is he aware that many companies in other countries gain tax and other financial advantages by not dumping drugs in their own country and instead sending them overseas? What will he do to reduce the number of deaths? Those very well-meant drug donations are leading to drug deaths.

Mr. Rifkind: The hon. Gentleman is making some serious allegations. I think that we all wish to praise those charities and individuals who are trying to help Romania receive the drugs and other medical supplies that it urgently needs. Efforts must of course be made to ensure that there is no abuse in such arrangements. If he has evidence suggesting that there is a serious problem of the type that he mentioned in Romania, he should make it available so that the case can be properly investigated.

Kashmir

Ms Lynne: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had recently with the Indian Government regarding Jammu—Kashmir. [18296]

Dr. Liam Fox: My right hon. and learned Friend the Foreign Secretary discussed Jammu and Kashmir last


month with Prime Minister Deve Gowda and Finance Minister Chidambaram in the margins of the World Economic summit, in Davos. I raised the subject in all my discussions when I visited Pakistan and India, from 26 February to 1 March.

Ms Lynne: Is the Minister aware that we are still receiving reports from Indian-controlled Kashmir of killings, torture and rape'? Does he agree that a just solution that involves not only the Governments of India and Pakistan but the people of Kashmir must be found urgently? The situation is becoming even more urgent, as we now know that Pakistan and India are nuclear powers.

Dr. Fox: It has always been the Government's position that a solution to the Kashmir question must be between India and Pakistan, as the nations involved. However, it is also self-evident that we have a humanitarian interest in the welfare of ordinary Kashmiris. During my visit two weeks ago, I met Chief Minister Farooq Abdullah and the Prime Minister of Azad Kashmir, and we discussed the very issues that the hon. Lady mentioned—the need for prosperity, order and reconstruction in Kashmir, for the sake of the welfare of ordinary Kashmiris. The Government attach great importance to that goal.

Mr. Lidington: Is my hon. Friend any more optimistic after his meetings with the two Kashmiri representatives about the chances of restoring respect for human rights and moving towards a political settlement that is acceptable to the people of Kashmir? Does he think that there will be any role for the United Kingdom in using its good office to help promote such a settlement?

Dr. Fox: At the risk of repeating myself, given my answer to a previous question, we make our good offices available should both sides of a conflict wish to use them. The settlement must be between India and Pakistan. It is extremely encouraging that the new Pakistani Government have used their large mandate to undertake an early dialogue with India. Overtures are being made in both capitals, and the responses are encouraging. We hope that a wider and deeper dialogue will emerge from those.I am delighted by the signs that high-level talks will be held later this month. That bodes well for the future.

Mr. Robin Cook: I congratulate the Minister on being the first Minister for decades to pay an official visit to Srinagar, and I join him in welcoming the forthcoming talks at ministerial level between India and Pakistan. Does he agree that, if there is to be a successful settlement to halt the loss of life and breach of human rights in Kashmir, it must be acceptable to the peoples of Kashmir? Will he assure the House that there will be no let-up in the pressure for information on what has happened to the missing hostages until they are released or their relatives are told the truth of what has happened to them?

Dr. Fox: To start with the right hon. Gentleman's second point, one of the main reasons for my visit to India and Pakistan was to discuss the hostages and show both Governments that the issue is high on our political agenda. We have made it quite clear that we continue in our efforts to resolve the matter. The right hon. Gentleman has the Government's complete assurance on that. We have always made it clear, as one of the Government's

three points on a Kashmir settlement, that we believe in an improvement in human rights and a genuine political process that has to be underpinned by stability and prosperity. I am quite encouraged, therefore, by the return to civilian policing in Kashmir as increased civil order is a prerequisite to the solution that hon. Members on both sides of the House wish to see.

Hong Kong

Mr. Jamieson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the funding of the education of employees of the Hong Kong Government being educated in British independent schools. [18299]

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): Policy on the payment of education fees for the children of employees of the Hong Kong Government is a matter for the Hong Kong Government.

Mr. Jamieson: Is the Minister aware that education is a highly valuable British export and that some foreign Governments, such as Hong Kong, are paying for pupils to attend private schools here, some of which—for example, the Quantock school in Somerset—have been shown by the Office for Standards in Education to be seriously deficient? What measures does he propose to ensure that the Hong Kong Government receive the Ofsted report on Quantock school and, more importantly, what does he propose to do to make sure that the good reputation of many excellent schools and universities in Britain is not undermined by a small minority of seriously deficient private schools?

Mr. Hanley: I can assure the hon. Gentleman that we make available information about British schools and colleges to countries throughout the world, not least through the British Council. As for the report to which the hon. Gentleman refers, what the Hong Kong Government choose to read is a matter for them. Perhaps it would be helpful to the hon. Gentleman, however, if I say that the Quantock school is not on the list of FCO-approved schools.

Mr. Davidson: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of China about the future of Hong Kong. [18300]

Mr. Rifkind: I met Chinese Vice-Premier and Foreign Minister Qian Qichen on 14 February. Most of our discussion focused on Hong Kong.

Mr. Davidson: Is the Minister aware of the great concern among Opposition Members about the Provisional Legislature and that many of us take the view that the Provisional Legislature as presently constituted is in breach of Sino-British agreements? What steps is he taking to make sure that the Chinese are aware of our position, which is that the role of the Provisional Legislature should be minimised until a proper legislature can be elected?

Mr. Rifkind: We very much agree that the proposal to replace the elected legislature by a provisional one is at


the very least contrary to the spirit of the joint declaration, and may be in breach of it. The joint declaration provides for an elective legislature, not one appointed by people who have themselves been appointed by the Chinese Government. We made that clear in a firm statement last December and said that we would be willing to have the matter tested by the International Court of Justice. That requires the agreement of both parties to a dispute and, so far, the Chinese have declined to agree to the ICJ being invited to rule on the matter.

Mr. Redwood: Does my right hon. and learned Friend intend to pass the £40 billion of reserves in Hong Kong as a free gift to China at the date of transfer, or would he consider levying a success fee on the colony to reflect the many good years of British administration, which has been so successful in building up the prosperity of the colony, as some of that money would be most welcome here?

Mr. Rifkind: While I understand my right hon. Friend's question and have some sympathy with the thought behind it, the reserves of the Hong Kong Government belong to Hong Kong. Therefore, I regret to inform my right hon. Friend that, when sovereignty passes to China, the reserves will pass with them, hopefully to the benefit of Hong Kong.

Sir Russell Johnston: Did the Foreign Secretary have an amicable meeting? If he were an independent-minded journalist in Hong Kong, would he feel confident after that meeting that he would be able to pursue his trade unfettered after the handover?

Mr. Rifkind: The Hong Kong economy remains remarkably robust. Economic growth has slumped to just 6 per cent., which people in most parts of the world would think fairly satisfactory. Confidence in Hong Kong is fragile because there is unavoidable uncertainty. I believe that Hong Kong opinion has welcomed the statement by the chief executive designate that all the senior officials of the Hong Kong Government are to continue in office. We also welcome that. However, some other developments, particularly on human rights, have been disturbing.

Sir Patrick Cormack: Bearing in mind this country's continuing legitimate interest in Hong Kong after 30 June, will my right hon. and learned Friend give serious thought to the establishment of a special committee of both Houses to monitor developments in Hong Kong up to 2000 and for the remainder of the 50 years written into the joint declaration?

Mr. Rifkind: Our interest in Hong Kong will certainly not cease on 30 June. Under the terms of the joint declaration, the Joint Liaison Group, which consists of British and Chinese officials, will continue to meet until at least 2000. We shall therefore have a continuing legal responsibility to help monitor the implementation of the joint declaration. I shall certainly undertake to give serious consideration to my hon. Friend's suggestion.

Intergovernmental Conference (Ministerial Group)

Mr. Spearing: To ask the Secretary of State for Foreign and Commonwealth Affairs how many meetings

of the ministerial group of the intergovernmental conference on a new European Union treaty Ministers have attended in 1997; and at which meetings the proposed protocol on the place of national parliaments was discussed. [18301]

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): In answering this question, I ask for your indulgence for the second time, Madam Speaker. The hon. Gentleman is standing down at the next election and I want to take this opportunity to pay tribute to him for all the work that he has put in, particularly his nine years as Chairman of the European Scrutiny Committee, at a time when that Committee was less fashionable. As to his question, there have been two IGC meetings at ministerial level this year. The protocol on national Parliaments was last discussed on 25 November.

Mr. Spearing: I thank the Minister for his kind words and pay tribute to the hon. Member for South-East Cornwall (Sir R. Hicks)—[HON. MEMBERS: "Hear, hear."]—who has had 22 years on the Committee against my 18. He has presided with impartial courtesy.
Will the Minister tell those at the conference that the Select Committee and, I think, all hon. Members, have doubts about the advisability of giving COSAC—the informal meeting of representatives of member state Parliaments—specific powers or duties, or even hinting at that? National Parliaments are the unique democratic institutions that express the continued existence of nations and the continued democratic freedom of their peoples.

Mr. Davis: I have a great deal of sympathy with the hon. Gentleman's point. I add my voice to his tribute to my hon. Friend the Member for South-East Cornwall (Sir R. Hicks). Many people have put a lot of work into the Committee.
The hon. Gentleman made an important point. I have argued about the importance of leaving to nation states what their Parliaments do and how they structure their democratic accountability. The Government have supported the more informal and less constrained approach argued for by the Committee and put forward in the Irish text.

Sir Robert Hicks: I remind my right hon. Friend that, at the Dublin meeting of the European affairs committees of national Parliaments, it was agreed unanimously that all documents, regulations and directives emanating from the Commission should go to national Parliaments at least four weeks before the Council of Ministers takes any decision on the provisions contained in those documents. Will my right hon. Friend confirm that the Government fully support that position to allow due scrutiny of all the provisions emanating from Brussels?

Mr. Davis: I shall say more than that. The proposal that there should be a legal requirement written into the treaty came from a Select Committee, supported by the Government. It is probably unique for a protocol to be put into a substantive treaty in that way. We shall support the proposal, because we were the first advocates of the argument.

Ms Quin: I join the Minister in paying tribute to my hon. Friend the Member for Newham, South


for all the work that he has done to ensure proper scrutiny of European legislation.
In the few remaining opportunities that the Minister will have to attend European meetings, will he explain to his colleagues and the House why the Government have so frequently ignored recommendations from the European Scrutiny Committee for a debate on the Floor of the House? Will he take a leaf out of the Swedish Government's book and allow for much greater scrutiny of the second and third pillars of the European Union—common foreign and security policy, and justice and home affairs—which, so far, have had little scrutiny?

Mr. Davis: I say two things to the hon. Lady. First, she should read the Select Committee's report, which makes it clear that our scrutiny procedure is as good as any in Europe—a point that she has obviously not taken on board. Secondly, with respect to the treatment of second and third pillar proposals, third pillar matters, which have legislative import, are obviously brought to this House. It is significant that we argue for unanimity on those actions, which makes the Government's accountability to the House absolute.

Sir Irvine Patnick: Did my right hon. Friend have an opportunity to see the reported comments of the right hon. Member for Livingston (Mr. Cook) in The Times of 7 March, where he undertook to make surrenders and six changes to the Government's policy? Is that not an abdication of Labour's responsibility? Will it not undermine the British negotiating position?

Mr. Davis: I did see the report of the right hon. Gentleman's comments at the weekend. My hon. Friend is right. The Labour party has undertaken to make six surrenders of British sovereignty in six weeks. If it were ever in government, we would never get those back.

Iran

Mr. Purchase: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Britain's relations with Iran. [18302]

Mr. Rifkind: We have serious concerns about many Iranian policies; until those are addressed satisfactorily, there can be no question of Iran having normal relations with the international community.

Mr. Purchase: I thank the Secretary of State for his answer. May I remind him that a Select Committee recently completed an inquiry into arms to Iraq, during which papers that had been promised in the House were denied to that Committee? Even the Crown jewels procedure was denied to that Committee in respect of certain papers. Why do the Government intend to subject some 3,500 documents taken from the Astra files to public interest immunity certificates when it was those files that first disclosed the arms to Iran scandal and when the House has said that it will use those certificates much more sparingly? Will he explain his and other Departments' actions in that matter?

Mr. Rifkind: This question is about Iran and I am not certain about the relevance of the hon. Gentleman's supplementary. Any proposals that involve the use of

public interest immunity certificates are subject to well-recognised criteria. As the hon. Gentleman knows, those criteria have been reformed in the light of the Scott inquiry's recommendations. The hon. Gentleman can therefore feel satisfied that there are proper safeguards.

Sir Cyril Townsend: Does my right hon. and learned Friend agree that neither western Europe's critical dialogue nor the United States' policy of dual containment have been particularly successful in recent years? When a new course is being decided, will he resist the temptation to turn Iran into a pariah state, beyond the bounds of the international community? Does he agree that Teheran is just the sort of place where a British ambassador, with his skills and expertise, would have plenty of work to do?

Mr. Rifkind: We have made it clear that we would not be attracted by proposals for economic sanctions unless they were likely to have the support of the United Nations Security Council as a whole, and that is not likely to arise. However, it is simply not possible to have normal relations with Iran. There have been significant examples, which, I am afraid, continue, of Iran assisting subversion and of the likelihood that it supports terrorist organisations. We have a particular problem with regard to the British citizen, Salman Rushdie. That continues to see no improvement whatever, and some aspects have deteriorated in recent weeks. Against that background, we regret that it is not possible to have proper relations with that country.

Mr. Patchett: We certainly agree with the Foreign Secretary's condemnation of Iran's record on human rights and involvement in terrorism. Against that background, can he explain why, in the very week in which the regime in Iran yet again confirmed the fatwah against Salman Rushdie and increased the price on his head, the Government decided to sponsor a trade fair in Teheran? Why do the Government indulge in such actions when it is clear that the signals give comfort to the regime in Iran and condone its behaviour? Is it not clear that, rather than being tough on terrorism, the Government are prepared to trade with anybody?

Mr. Rifkind: I was waiting for the hon. Gentleman to say whether any future Labour Government would break economic links with Iran and cease to trade with it. I explained to the House a few moments ago that we do not believe in economic sanctions. Clearly, the hon. Gentleman nevertheless felt that he had to continue with his supplementary. There may be a difference of view between the Government and the Opposition: we believe that economic links with Iran are sensible and should not be discontinued. If the hon. Gentleman disagrees, he should have said so and not used weasel words.

Lady Olga Maitland: What steps is my right hon. and learned Friend taking to monitor the serious build-up of weapons in Iran, far in excess of its national needs? Is he aware that the build-up is causing great concern in the Gulf states, which feel that their security is being threatened?

Mr. Rifkind: Yes, I very much agree with my hon. Friend. This morning, I met the Defence Minister of Saudi Arabia, and I know that many of the moderate countries


in the region are extremely concerned about the expansion of the Iranian military capability. Iran recently purchased Russian submarines, and there is concern that it may be seeking to advance a nuclear capability, so it is necessary to monitor those matters carefully and to do all that is in our power to dissuade Iran from such a course of action.

Intelligence Services

Mr. Cohen: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the work of the United Kingdom intelligence services overseas referred to in the Intelligence and Security Committee's annual report 1996. [18304]

Mr. Rifkind: It is the policy of Her Majesty's Government not to comment on matters connected to the intelligence services.

Mr. Cohen: Was the Committee correct in criticising the intelligence services? Who provides the services' direction and objectives? Are they still obsessed with Russian spies and facilitating arms deals, when they should be tackling the flood of drugs entering the country and helping those resisting tyrants such as Saddam Hussein? Who seriously checks whether they give value for money?

Mr. Rifkind: The intelligence services operate in respect of any action that could be a threat to the security of the country and do not confine themselves to one foreign state. They act under guidelines laid down by the Government. We supported the creation of a Committee of the House to provide some supervision for the first time; the hon. Gentleman might have acknowledged that fact.

Kashmir

Mr. Chris Davies: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received since 1 January from British citizens supporting the case for a free and independent state of Kashmir. [18305]

Dr. Liam Fox: We continue to receive occasional letters supporting the case for a free and independent state of Kashmir. We have received seven such representations so far this year.

Mr. Davies: Does the Minister accept that many of us will welcome the sentiment expressed by the Prime Minister in Pakistan in January, that the solution to the problems in Kashmir lies with the Governments of India and of Pakistan and the Kashmiri people? Will he help to give some practical effect to those excellent sentiments by urging Britain's permanent representative at the United Nations to take the lead in incorporating those principles into a future resolution of the General Assembly?

Dr. Fox: We have always made it clear that we advocate a genuine political process in Kashmir in which the aspirations of the population can be accommodated. The Prime Minister was reiterating that in the remarks in Lahore to which the hon. Gentleman referred. We have made our position very clear: it is a matter for India and Pakistan to sort out. What our position lacks in novelty

it makes up for in commendable consistency. We have supported that policy in the past, we support it now, and we shall support it in our fifth term.

Mr. Harry Greenway: Will my hon. Friend put all the pressure he can on all concerned with the Kashmir problem, because it is a great tragedy for the people of the area? Will he press the Governments of India and Pakistan to meet until the problem is finally resolved and, of course, involve the people of Kashmir in the process?

Dr. Fox: My hon. Friend is right; we should use our excellent links with India and Pakistan to encourage dialogue. I am not sure that I would use the word "pressure". We should encourage our friends in the region to talk. I welcome the high-level talks that are to take place later this month. Unlocking the difficulties in Kashmir would create an opportunity for the wider development of SAARC, the South Asian Association for Regional Co-operation. The political and economic development of the region can only benefit all the people of the region, including Kashmir.

Mr. Corbett: Was the Minister given assurances when he visited Pakistan that the regime would respect the integrity of an independent Kashmir? In welcoming, as we all do, the coming talks between the Indian and Pakistan Governments, will he make it clear that the good offices of the British Government are available before they are requested?

Dr. Fox: This is becoming an advertisement session for the good offices of the United Kingdom. They are, as I have said three times, available for those who wish to use them, but both parties in a dispute have to ask us to become involved. India and Pakistan are opening up a dialogue; we welcome and encourage that. I was reassured by my talks with Ministers in the new Pakistan Government that they are committed to moving the dialogue forward. I think that the House can look forward with more optimism than for some time to dialogue and reconciliation being started properly.

Libya

Mr. Dalyell: To ask the Secretary of State for Foreign and Commonwealth Affairs what action he has taken in respect of sanctions against Libya in the last 10 days. [18306]

The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): As part of a continuing process, we have in the past 10 days reaffirmed to five Governments that sanctions must remain in place until the Lockerbie accused are brought to trial in Scotland or the United States.

Mr. Dalyell: Is it not to be marvelled at that, five long minutes ago, the Foreign Secretary said that we must have sanctions against Libya, but not against Iran? The contrast is extraordinary. This was a crime that the Iranians may well have committed and which the Libyans almost certainly did not. Have any of the five Ministers sitting on the Front Bench seen with their own eyes—a Scottish QC might have been curious about this—what evidence the Crown Office adduces in the case against Libya?
On the Americans, having drawn the attention of Ministers to Paris Match, The Scotsman and the case of James Thurman, who is accused of forging forensic evidence, has any Minister found out whether Britain has any evidence against Libya that does not depend on dubious, dodgy American sources?

Sir Nicholas Bonsor: The hon. Gentleman has managed to fit four questions into one but, with your indulgence, Madam Speaker, I shall answer all four. On Iran, my right hon. and learned Friend the Foreign Secretary said that the problem is that the United Nations Security Council would be most unlikely to consent to sanctions. In the case of Libya, we are dealing with United Nations Security Council sanctions. On the evidence against the Libyan accused, I am satisfied that we have evidence—

Mr. Dalyell: Has the Minister seen it?

Sir Nicholas Bonsor: I shall come to that.
I am satisfied that we have evidence that justifies taking the case forward. I say that not because I have seen the evidence but because three successive Lords Advocate have examined it. They are all leading lawyers and they are all satisfied that there is evidence that justifies us in pursuing the case. The hon. Gentleman has no reason to criticise that approach.
On his fourth question, it is true that Mr. Thurman has been transferred—not suspended—but the case against the Libyans does not depend on any evidence that he might give. Forensic analysis was also done at the Royal Armament Research and Development Establishment. Professor Caddy made it clear that the evidence in that case and others was a true measure of the presence of the explosive RDX.

Arms Exports (Belarus, Ukraine and Russia)

Mr. Cousins: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the republics of Belarus, Ukraine and the Russian Federation on arms and armament exports. [18307]

Sir Nicholas Bonsor: We last held bilateral discussions on these issues with Belarus in April 1996, Ukraine in December 1995 and the Russian Federation in February 1997.

Mr. Cousins: The Minister will be aware that the spread of Russian military technology means that this country is contemplating the purchase of a staggeringly expensive anti-missile defence system. He will also realise that the countries of the former Soviet Union have on the arms markets of the world long-range sea-skimming missiles and cruise missiles, and are contemplating the sale of long-range anti-aircraft missiles to Cyprus. Can the Minister assure the House that we have actively under consideration as a high priority a mutual ban on missile technology—whether it is skim, cruise or ballistic, and whether the targets are naval, aircraft or on the surface? That is essential to the defence of this country.

Sir Nicholas Bonsor: I am not sure what the hon. Gentleman means by a "mutual ban", but we have no plans for a bilateral treaty of that type between ourselves and Russia. We are looking towards the possibility of a widely agreed rundown of arms of all types, particularly weapons of mass destruction. We last had discussions with Russia on arms sales in February, and we have specifically expressed our concern to that country about the missile sales to Cyprus and Iran. We keep a close watch on everything going on in this matter.

Mr. Viggers: Has my hon. Friend been briefed on the fact that some 234 out of the 450 members of the Russian Duma have joined a new anti-NATO group in the Duma? Does he think that this reflects a feeling of uncertainty and instability resulting from the present expansion of NATO? As NATO expands, will my hon. Friend undertake to keep very much in mind the fact that Partnership for Peace offers a good forum in which all issues, including arms control, can be discussed, and that it can help to assuage the concerns of Russia?

Sir Nicholas Bonsor: The Government are well aware of the concerns in the Duma and elsewhere in Russia regarding the expansion of NATO. We feel that it is important for security in central Europe, the west and the world generally that NATO expands, but we are conscious also of the legitimate concerns of Russia. We are hoping to take forward a Russian-NATO charter at the same time as the Madrid summit, and I hope that that will be put in place. I agree with my hon. Friend that the strengthening of Partnership for Peace and other security associations is a necessary part of the continuing trend towards a safer world.

Israel

Sir Mark Lennox—Boyd: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about monitoring arrangements for the EU-Israel association agreement. [18308]

Mr. Hanley: We, our EU partners and the Commission will monitor closely all aspects of the EU-Israel association agreement when it enters into force, as we do all such agreements.

Sir Mark Lennox—Boyd: As the Israeli Government's plans to proceed with the Har Homa settlement have been almost universally denounced—including by the British Government—will my right hon. Friend undertake at the imminent meeting of the political committee of the EU to press for the EU to express its profound opposition to those plans and for the introduction of extensive monitoring arrangements of the EU-Israel association agreement in all its aspects?

Mr. Hanley: My hon. Friend raised the latter subject when we discussed this matter in Committee. I gave an assurance then that we would look at this matter during the current discussions with our EU partners to ensure that human rights monitoring is carried out as frequently as possible. I hope that progress can be made tomorrow, but that remains to be seen.
As far as Har Homa is concerned, it bears repeating that—as the British ambassador to the UN made clear only last week to the Security Council—we regard all settlement building in occupied territory as illegal and as an obstacle to peace. Har Homa is a particularly sensitive case, because building a settlement there would pre-empt the final status talks concerning the future of Jerusalem.

Mr. Janner: In view of the Government's unparalleled recent experience of the matter, will the Minister proffer to Prime Minister Netanyahu some advice on how to control an unruly Cabinet without making unreasonable concessions to members of that Cabinet?

Mr. Hanley: The hon. and learned Gentleman should learn a lesson from the Israeli Cabinet—that coalitions, if ever considered, do not work very well.

Mr. Sumberg: When people take the easy route of criticising the state of Israel in these matters, while enjoying the peace and security of living in London or Canterbury, will my right hon. Friend remind them that Israel is a democracy, that it has a responsibility to its electorate and that in human rights it has a record that its neighbours would do well to emulate?

Mr. Hanley: My hon. Friend makes an extremely good point. We should never forget that Israel is a genuine democracy and that democracies sometimes throw up rather strange results—happily, for the past 18 years, our democracy has produced the right result. Democracy in Israel is extremely important and I hope that democracy will spread in the Palestinian Authority and that the rights of Palestinians and their legislation will develop accordingly. Human rights are not, after all, subject only to the whims of an electorate, but are of international concern. Both sides in that region should recognise that we take human rights very seriously and that human rights breaches—whether by Israelis or by Palestinians—will be treated equally.

Mr. Menzies Campbell: Will the Minister tell us what has been the response of Her Majesty's Government to the rather disturbing development over the weekend, when the United States used its veto in the Security Council to prevent discussion of Israeli policy towards settlements? Is not that a particularly disturbing development, given that Israel's determination to press ahead with Har Homa is not only putting the entire peace process at risk, but—as King Hussein's rather anxious intervention in the past 24 hours demonstrates—undermining the stability of the whole of the middle east?

Mr. Hanley: I understand the hon. and learned Gentleman's point, but the position of the United Kingdom and the United States are not that far apart. We agree that settlements are an obstacle to peace and that Israeli plans undermine the establishment of the trust that is absolutely vital to the successful negotiation of final status talks. The Americans have made their position clear. I believe that there is not so much a difference of view as a difference of tactics—the difference is one of tactics, not of policy. We both hope that we can persuade Israel to continue with the interim agreement, which is an international treaty, and that peace and prosperity will come to the region.

Mr. Batiste: Will my right hon. Friend confirm that about 70,000 Palestinians currently have permits to work in Israel? Is not the Europe-Israel association agreement designed to create greater prosperity and more jobs, both in Europe and in the middle east, for Palestinians and Israelis? Is not the creation of prosperity the basic building block of peace?

Mr. Hanley: I could not agree more: peace breeds prosperity and prosperity breeds peace. There is no doubt that the EU-Israel association agreement is an important part of helping to spread prosperity between Europe and Israel and I hope that progress on the EU-Palestine agreement will follow. We are pleased that we have agreed with our European partners an initiative, which I believe my right hon. and learned Friend the Secretary of State originated, for the EU special representative in that area to carry out a proper study of the economy of the Palestinian people, because there is little doubt that, unless it improves, frustration will grow, which might result in danger.

Rev. Martin Smyth: The Minister paid tribute to the presence of the EU representative. Will he acknowledge that there is a need for democracy on the Palestinian side? Will he welcome the move for Hamas to become more a political rather than a terrorist group? Will he also recognise, in the light of a concomitant democracy, that proportional representation knocks democracy off its hinges completely, as it places the emphasis on minority groups rather than on the centre?

Mr. Hanley: I shall not, in answer to the hon. Gentleman's last point, comment on electoral systems, which are the choice of the countries concerned. I say only that the hon. Gentleman is right; we need to make progress in all aspects of the peace process. I believe that Mr. Moratinos, the EU special representative, is doing an excellent job. He was here less than two weeks ago, when he met my right hon. and learned Friend the Foreign Secretary and me, and I believe that we have full confidence in what he is doing.

Royal Family (Overseas Visits Costs)

Mr. Tony Banks: To ask the Secretary of State for Foreign and Commonwealth Affairs how much has been spent by his Department on providing clothes for members of the royal family travelling overseas on official visits in the current financial year. [18311]

Mr. Rifkind: This Department has spent 15,259 so far in the current financial year on clothing costs for members of royal parties undertaking official overseas visits at the request of the Government.

Mr. Banks: I like a bit of decent gear myself, but that seems rather a lot of money to spend on royal clothes. I understand that, the year before, £47,000 was spent. Several members of the royal family, especially the Kents and Gloucesters, seem to visit countries with broadly similar climates but never seem to want to wear the same suit or dress twice. Why? Would it not save money for the taxpayer if there were a royal central pool of clothes—[Interruption.] It is a very serious


point. Members of the royal family could then recirculate them, which would be of use to them and to the hard-pressed taxpayer.

Mr. Rifkind: Regarding the hon. Gentleman's initial comments, I think the rest of his question illustrates why he is unlikely to be called on to represent Her Majesty's Government on overseas visits.

Mr. Banks: I did not need the Foreign Secretary to tell me that.

Mr. Rifkind: I think that is the only point we agree on.
The hon. Gentleman should reflect on the fact that, when members of the royal family go abroad, their entitlement, and that of those who accompany them, to some assistance with clothing applies only when they undertake visits at the express request of Her Majesty's Government. I also emphasise that only members of the royal family who are not in receipt of the civil list receive such assistance.

Sir David Steel: Has the Secretary of State reflected, in answer to the would-be mayor of Greater London, that he must have seen with his own eyes that, when our royal family travel abroad, their travel arrangements and entourages are conspicuously more modest than those of presidents or vice-presidents of republics throughout the world?

Mr. Rifkind: The right hon. Gentleman is entirely correct. I believe that this country benefits enormously from the ability of members of the royal family to travel abroad, and I pay special tribute to the remarkable achievement of His Royal Highness the Prince of Wales in his recent visit to Saudi Arabia, which I believe made a very substantial contribution to this country's relationship, not only with that country, but with all the countries of the region.

Middle East Peace Process

Mr. Simon Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs what new initiatives he is planning to assist the middle east peace process. [18313]

Mr. Hanley: We will continue to support the middle east peace process through our close contacts with all the parties involved. The UK played a leading role in the United Nations Security Council debate on 6 March, and on 10 March my right hon. and learned Friend the Foreign Secretary discussed with the United States Secretary of State how the international community could lend support most effectively to the peace process. With our full backing, the EU special envoy, Miguel Moratinos, has built up a constructive dialogue with both parties.

Mr. Coombs: Does my right hon. Friend agree that, whereas Israel is a secure and mature democracy, alongside it, Lebanon is a country with a democratic tradition and a strong desire for a democratic future which is frustrated at the moment by the fact that, unlike Israel, which is secure militarily within its own borders, it has not one, but two, occupying armies in different parts of

the country? What further steps does my right hon. Friend believe he, with others, can take to try to unscramble the impossibly complicated situation that exists in the Lebanon, building on the Wye plantation discussions?

Mr. Hanley: My hon. Friend makes the important point that many countries in the region need a better future—and, indeed, a better present. Young Israelis are losing their lives in southern Lebanon nearly every day—certainly every week. I know that Israel wants a comprehensive peace in the region as much as anyone. Lebanon wants it as well. Prime Minister Hariri told me when I was last in Beirut that, while there is a great desire for peace in Lebanon, they want peace at the same time as the Syrian track is concluded. I hope that there will be an early resumption of talks on the Syrian track, building—as my hon. Friend said—on the progress that was achieved at the Wye plantation.

Mr. Ernie Ross: The Minister will recall that, while we were discussing the EU-Israel association agreement in the Delegated Legislation Committee, the Israeli Cabinet was meeting to decide to go ahead with the Har Homa settlement. Many of us said at the time that the agreement should include a monitoring capacity or it would lead to nothing. Has the Minister read reports that the Israelis raided the offices of the National Democratic Institute in East Jerusalem, which is affiliated with the Democratic party in the United States of America? That shows that the Israelis cannot tell friend from foe, and emphasises the need for a monitoring capacity. Will he also confirm that our excellent consul general in Jerusalem will attend the discussions in Gaza this weekend called by Yasser Arafat in order to build on the peace process?

Mr. Hanley: I think that I can take hon. Members on this side of the House with me in paying tribute to the work of the hon. Gentleman and others on the Palestinian cause and the cause of peace generally in that region.
I have talked about Har Homa in forthright terms, but we must make more progress on redeployment in the interim agreement. I believe that we should see more progress on the airport and the port in Gaza, safe passage between Gaza and the west bank, more extensive redeployment in the second and third phases than we have seen so far, and a lifting of barriers to the Palestinians generally. That would improve the economy, which would help Israeli security. As I have said before, I think that Har Homa is a serious problem that must be addressed. It is a danger to peace.

EU Political Co-operation

Mr. Whittingdale: To ask the Secretary of State for Foreign and Commonwealth Affairs what are his main objectives in respect of political co—operation for the forthcoming European Council meeting in Amsterdam. [18314]

Mr. David Davis: We will want to reach agreement in Amsterdam on a range of practical measures in the intergovernmental conference, which are designed to improve the effectiveness of political co-operation.

Mr. Whittingdale: Does my hon. Friend agree that the horrifying levels of unemployment afflicting Germany


and France are proof of the total failure of the European social model? Will he continue to reject that model? Will he confirm that the Government are determined to retain full control of our economic and employment policies?

Mr. Davis: My hon. Friend is absolutely right. The tragedies in the German employment market and recent events in Belgium and France are cause for great regret. That is a lesson for all of us, which is not lost on Toyota—which Labour Members like to quote—Nissan, or the German head of Jaguar. They all recognise the dangers of the social chapter, the problems that it would cause our economic and employment policies, and the consequences of relinquishing policy in an area where one has succeeded to people who have failed.

Mr. Robin Cook: Has the Minister seen the letter, which appeared in yesterday's Financial Times, from more than 20 leading industrialists expressing their dismay at an arm's-length policy towards Europe? Is he aware that today's Financial Times carries two letters: one from the Secretary of State for Trade and Industry, saying that the industrialists were entirely right; another from the hon. Member for Stafford (Mr. Cash), saying that it was all empty rhetoric and bogus fears? With which of those Conservative views does he agree—or will he pretend that he agrees with both of them?

Mr. Davis: If the right hon. Gentleman had listened to the radio yesterday, he would have heard my view about the letter. It is very straightforward. No one challenges the fact that the single market—which, after all, this Government virtually invented and pushed through the European Union—is of value to Britain, and of more value to Britain than any other country because Conservative policies have produced our economic success and given us the ability to exploit that market.
However, a number of people, including, I am sure, the right hon. Gentleman, tried to represent that concern about leaving Europe as a challenge to deal with the political threat that Europe makes to the sovereignty of Britain. We can deal with that threat through our robust negotiating stance without jeopardising the major advantage that we get from Europe and the economic opportunities that come from it.

Mr. Legg: Will my hon. Friend confirm that any delay to the timetable for monetary union that involved monetary union taking place later than 1 January 1999 would require a treaty amendment?

Mr. Tony Banks: The answer is no.

Mr. Davis: I am not sure that the hon. Gentleman is correct. Our view is that we must, first and foremost, ensure that any monetary union that goes forward works. If there is any fudging on it, we should not go forward.

Nigeria

Mr. Burden: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the human rights situation in Nigeria. [18315]

Dr. Liam Fox: We remain extremely concerned about the human rights situation in Nigeria.

Mr. Burden: I welcome the Government's expression of concern, which so many of us feel about the human

rights situation in Nigeria, and ask the Minister to do two things: first, call clearly for Chief Abiola and the other people who are in prison on the basis of their political beliefs to be released quickly; secondly, if the regime in Nigeria has evidence against detainees, call for them to be brought to trial, rather than left in prison without trial.
It is important that there is consistency on the part of the British Government. Will the Minister make representations to the Home Office? It sits ill with his statement that the Home Office is appealing against the decision of an adjudicator to grant political asylum to a torture victim from Nigeria. The fact that he was tortured was established by independent medical evidence. The Home Office should not attempt to deport someone who was the victim of torture by that regime.

Dr. Fox: You, Madam Speaker, would not, I am sure, allow me to trespass on Home Office territory. On the first part of the hon. Gentleman's question, we fully support the Commonwealth ministerial action group position and regularly reinforce that message to Nigeria. It calls for the immediate release of all political prisoners, including Chief Abiola; the restoration of a democracy in which all can participate; the early resolution of the case of the Ogoni 19; and a review of prison conditions.
We want those steps to be taken as soon as possible. The Government are deeply disappointed that the two United Nations Commission for Human Rights thematic rapporteurs have not been able to visit Nigeria and fulfil their mandate. That causes us concern. We will consider with our EU, Commonwealth and other partners the scope for further action at the UN Commission for Human Rights in the light of the report, when we have it.

Mr. Tony Lloyd: The Opposition welcome the Minister's remarks about political prisoners. I invite him once again to address the legitimate question raised by hon. Friend the Member for Birmingham, Northfield (Mr. Burden). If the Foreign Office view is that the situation in Nigeria is bad and deteriorating, it is incomprehensible that the Home Office—part of the same Government—is not prepared to take the same view in respect of those fleeing political pressures in Nigeria.

Dr. Fox: The job of the Foreign and Commonwealth Office in this case is to make it clear to Nigeria what we think about the current situation there. We are extremely concerned about the human rights situation. I have laid out the position that we pushed through CMAG, and we intend to continue to push that position. I suggest that the hon. Gentleman raises his question with the Home Office and the Ministers who have responsibility for that matter.

Israel

Mr. John Marshall: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about relations between Britain and Israel. [18319]

Mr. Rifkind: They are excellent, as demonstrated by the recent state visit of President Weizman.

Mr. Marshall: I thank my right hon. and learned Friend for welcoming the recent visit by the Israeli President, during which the President offered a reciprocal invitation to Her Majesty the Queen. Many hope that that invitation will be accepted in the near future.

Mr. Rifkind: We are delighted that the President's state visit was so successful. Reciprocal state visits are considered with great care and sensitivity. I note my hon. Friend's remarks.

Mr. Faulds: May I preface my question with an apology for turning up so late for foreign affairs questions? As you will recall, Madam Speaker, I have been an assiduous attender for many years. I have the best excuse in the world: I was entertaining to luncheon one of the most distinguished cultural figures in Britain, to whom the nation should be deeply grateful. I do not wish to publicise my name along with his. I am a mite in the cultural world; this chap is a magnifico.
May I now take up the point made in the question? The last thing we need now is good relations between Britain and Israel. The Israeli Government have behaved

disgracefully in trying to pay no attention whatever to the Oslo agreements. Is it not time that the British Government made strong representations to President Clinton to the effect that there is no hope whatever of peace in the middle east for as long as the American Zionist lobby runs American foreign policy?

Mr. Rifkind: The hon. Gentleman can best be described as a magnificent mite. I think that that covers all the qualities that he has displayed for many years.
Let me deal with the hon. Gentleman's substantive question. Of course we are conscious of the great concern about the current state of the peace process, but I think that the hon. Gentleman was unfair in reaching his conclusion. There have been important and beneficial developments—the Hebron agreement, the release of female Palestinian prisoners and a number of other developments. Nevertheless, we share the fear, especially in the light of the recent Har Homa announcement, that that could involve a serious setback for the process. We hope that the Israelis will consider carefully before implementing the decision that was announced recently.

Electronic Devices (Madam Speaker's Statement)

Madam Speaker: I undertook yesterday to make a statement about the use of electronic devices by Members in the Chamber. I have previously ruled that Members who carry such devices which make a noise should make certain that they turn off the audio function of the instrument before coming into the Chamber. I can have no objection to instruments that merely vibrate so as to attract the attention of the bearer. Clearly, many Members carry such instruments, and they can serve a useful and unobtrusive purpose.
Yesterday, an hon. Member used an electronic device to raise a point of order. He appeared to be receiving information on a small screen—[Laughter.] I did not think that hon. Members found it so amusing yesterday. He appeared to be receiving information on a small screen, relayed to him from outside the Chamber. I strongly deprecate such practices. For any Member to be prompted in that way by an outside group is totally unacceptable.
I am aware that various kinds of such instruments exist, and that, carried in handbag or wallet or even on the wrist, they can provide the owner with useful information. Provided that they are silent, I can have no objection to such devices—and, even if I had an objection, I do not see how I could prevent Members from bringing them into the Chamber. I am not, however, prepared to accept the use of such instruments as an aide memoire by a Member who is addressing the House. Similar considerations apply to earpieces that are used to receive messages. In future, I shall order a Member who is seen to be indulging in such a practice to resume his or her seat immediately. That rule will be applied in Committees of the House as well as in the Chamber.
For the avoidance of doubt, I should make it clear that nothing that I have said is intended to affect Members with a declared disability who may require technical support to carry out their duties. Their requirements will be individually determined in the light of their particular circumstances.

Mr. Dafydd Wigley: On a point of order, Madam Speaker—on that point.

Madam Speaker: Points of order are taken after statements.

Social Services

The Secretary of State for Health (Mr. Stephen Dorrell): With permission, Madam Speaker, I should like to make a statement about the Government's White Paper on the future of social services in England and Wales.
Local authority social service departments were created in roughly their present form in 1971. They are responsible for social care services for a wide variety of people, among them elderly people, those with physical or learning disabilities and mentally ill people, as well as children who would otherwise be at risk of neglect or abuse. The many local authority members, directors and staff who over that long period have built those services deserve credit for what has been achieved.
The Government believe that the growing size and importance of social service departments make necessary a major reassessment of their role and structure. Today's White Paper sets out a package of proposals for the reform of social service provision. The Government will implement those proposals in a social services reform Bill that we shall introduce early in the next Parliament.
Social service departments currently combine three responsibilities that sit uneasily together: first, they assess care needs and use public money to commission care; secondly, they provide directly a range of social care services; and, thirdly, they regulate private and voluntary sector providers of social care services. The centrepiece of the Government's social services reform Bill will be the separation of those three functions.
The Bill will provide that social service departments should in future concentrate on their role as assessors of care need and commissioners of care services. It will require each social service authority to publish separate accounts for its assessment and commissioning function, and it will provide for the making of secondary legislation that will set out the quality and value-for-money issues on which social service departments will be required to publish performance indicators. Those indicators will allow council tax payers to examine the performance of their own social service department and to compare its performance with that of other equivalent departments.
The Bill will also amend the power of social service authorities to provide social care services. At present, social service authorities have a general power to provide such social care services as they think fit to meet local needs. The Government propose to amend that power to provide that, in respect of residential and domiciliary services for adults, the power can be used only when an authority can show that direct provision of service by the local authority is necessary to meet a need that cannot be met locally by the non-statutory sector.
The legislation will require formal reviews of existing direct provision for adults to be conducted periodically by each authority; those reviews will be transparent and the views of local interested parties will be sought. The law will place a strong and clear onus of proof on authorities wishing to retain existing direct provision or to expand their commitment to directly provided services. The criteria against which the review will have to be carried out will be set out in regulations.
The third element of the social services reform Bill will be a new structure for the regulation of social care and nursing home provision. The Government believe that it


is important that that function is separated from others currently carried out by social service departments. We also believe that the standards that are required by regulation should be applied to both public and private sector provision, and that separate regulation of care homes by health and social service authorities, which can currently lead to wasteful duplication of effort, should be brought to an end.
The legislation will therefore require local health and social service authorities to create joint statutory bodies in each area, with membership drawn from the participating authorities. Those bodies will regulate both the social care services now regulated by local authorities and the nursing homes currently regulated by health authorities. The scope of regulation will be extended to cover private sector domiciliary and day care services and small children's homes, as well as the public sector social care services that are currently free of regulation. Health authorities will continue to regulate private hospitals and certain other specialist health facilities, as they do now.
The creation of a single regulatory authority for social care raises the question whether it is right to maintain the legal division of adult care homes into residential homes and nursing homes. The Government see the attraction of moving towards a single category, in which each care home would be assessed and licensed according to the needs of the clientele it is intended to serve. That more flexible structure would make it easier for people who become more dependent to move to a different level of care without having to move to a different care home. The details of such a change will need full assessment, and the Government will consult further on those issues.
In addition to those important changes to the structure of social service departments, today's White Paper takes forward some other important aspects of social service provision. Under the Children Act 1989, the child's welfare is the paramount consideration. The Government believe that that is the correct focus. They do not believe, however, that emphasising the wishes of the individual child should be allowed to become an excuse for distorting the proper relationship between children and adults. We should not blindly ascribe to all children the capacity to make mature decisions about their interests, which are the proper responsibility of adults.
The chief inspector of social services in England recently issued revised guidance to the managers of children's homes, which underlined their responsibility to provide a disciplined framework for the lives of children in their care. The Government will continue to monitor the operation of the Children Act 1989, and they will act again if it can be demonstrated that there is a need to reassert the proper balance between the rights of the child and the responsibilities of adults.
The social services reform Bill will also place a new obligation on the local authority collectively, not just on the social service department, to prepare a full children's services plan. Those plans will be required to show how social services, education, health and housing authorities, as well as the juvenile justice system, will co-operate to identify children who are at risk and to take the action necessary to safeguard their interests.
Finally, on children's services, the White Paper sets out the Government's intention to improve the training provided to social workers who work with children. The Government believe that social workers who undertake that most difficult area of work with children should receive specialist training, as do approved social workers who are entrusted with powers under the mental health legislation.
Today's White Paper is the third element in the reform package for key elements of the modern welfare state that the Government have unveiled in the past 10 days. Last week, my right hon. Friend the Secretary of State for Social Security set out the Government's plans to improve pension provision over a generation. Earlier this week, I set out our plans to assist many of today's generation of pensioners in planning for the costs of dependency in old age. In today's White Paper, the Government show how social service departments need to evolve to provide high-quality, good-value services.
The changes proposed in the White Paper reflect the Government's view that, in a modern society, the principal responsibility for meeting social care need rests on individual citizens, who should plan to meet their own needs and respond to the needs of their families and their neighbours. The role of statutory social service departments is to act as a support to those, including carers, who meet social care needs in those ways. Statutory social services provision is an essential function in a modern society, and today's White Paper shows how the Government intend to ensure that it continues to be delivered to a high standard.

Mr. Chris Smith: Despite all the hype about radical reform, does not the statement merely amount to the enforced privatisation of those relatively small parts of residential care not already carried out by the private or voluntary sector? Coupled with that was the sabre rattling of the Secretary of State about political correctness on children's services, with precious little action to back it up.
Does the Secretary of State acknowledge that well over three quarters of residential care is provided by the independent sector? Surely the last thing that is needed is ideologically imposed privatisation from Whitehall. Should not those decisions be made locally, taking into account local circumstances? Decisions should be made by the local director of social services, and should not be dictated by the Secretary of State.
Is not the right hon. Gentleman making an automatic assumption that the private sector is always good and the public sector is always bad? Surely such dogma is as outdated as if we on the Opposition Benches tried to argue that the reverse was so. Is not the common-sense approach to secure a mix of accommodation appropriate to the needs of the elderly people concerned?
Will the Secretary of State confirm that his figures about cheaper private sector costs do not compare like with like? Has he not simply taken the total gross expenditure and divided it by the number of residents—taking no account whatever either of the dependency of the resident in each case, where the higher levels of dependency are overwhelmingly concentrated in the local authority-provided sector, or of the standards of accommodation, food and care provided?
Is not that point strongly borne out by the report that has just been produced jointly by the Audit Commission and the social services inspectorate from the Secretary of State's Department, after carrying out an independent evaluation of services provided by Stockport metropolitan borough council? Does not the report say:
Care for older people was particularly well organised and of good quality"?
Does not that report also specifically commend Stockport metropolitan borough council for having developed
a mix of providers for older people's services"?
I should like to ask the Secretary of State three further specific questions. First, in paragraph 2.17 of the White Paper, he envisages the development of a voucher scheme for nursing homes. Can he tell us what the cost of administering that scheme will be? Will we not simply get the same shambles as has occurred with nursery vouchers? Secondly, in paragraph 2.30, he says that a local authority can provide its own care only where there is "insufficient independent sector provision". Does that in effect mean that, no matter what the comparable quality of care, if there is space in the private sector, it must be used? Thirdly, is not an inevitable consequence that, as local authorities are forced more and more into the use of private sector spaces, local authorities' own accommodation will become emptier and unviable, and in a relatively short period, elderly residents will have to be forcibly moved out of their homes?
With regard to what the White Paper has to say on children, is not all that we have had from the Secretary of State rhetoric—rhetoric, I suspect, aimed at the right wing of his party? If one searches for action in the White Paper, one finds a Labour policy for better training for social workers and the preparation of children's services plans, and otherwise only paragraph 3.4, which grandly states:
The Government will continue to monitor the influence of the Children Act on social services departments.
There is not much action there. If the Secretary of State wanted to take arms against political correctness, why on earth has he not brought forward the adoption Bill, which was ready at the time of the Queen's Speech, was supported by Members on both sides of the House and takes a common-sense approach to adoption and parenting issues?
We are all concerned to ensure good value for money in social services, and high standards of care for some of the most vulnerable people in our communities. May I therefore welcome the commitment to independent regulation and monitoring of residential care across all sectors—private and public—for which we have long argued? That must be the way forward—but there is no need to privatise in order to achieve it. Why also, however, have the Government not embraced the idea of a self-financing council of social service, to regulate the profession and provide reassurance on safety to the public? We shall legislate for those measures in our social services reform Bill after the election.
In short, does not this whole White Paper represent the triumph of dogma over common sense? Will we not see precisely the same internal market imposed on social services, which has caused so much damage to our health service in the past six years? What we want is a sensible mixture of private, voluntary and public provision, decisions taken locally, not dictated by Whitehall, strong and independent regulation to ensure high standards, and

the needs of service users put first, not those of providers, from whatever sector they come. In short, we need a Labour Government.

Mr. Dorrell: The hon. Gentleman is clearly in need of a message, electronic or otherwise, from the hon. Member for Hartlepool (Mr. Mandelson). In that tirade, he has just demonstrated how thin the veneer is that covers the true face of the Labour party. Show it any concept that there may be a way forward to improve services through choice, and it runs a mile. It opposed the introduction of choice and the private sector through the 1980s in a wide variety of measures; it now says that it was right. A few weeks ago, it opposed the introduction of the private sector into London Underground. It is now opposing the further development of the private sector in the provision of social care. Old Labour shows through, the moment it is given the remotest opportunity to do so.
The hon. Gentleman prefers to believe that the higher cost of residential care provision in the public sector is related to dependency. The problem for the hon. Gentleman is that the evidence simply does not bear that out. When we consider the average age of people in independent sector homes, we find that it is higher than the average age in the local authority sector, so to argue that dependency is higher in the local authority sector is not borne out by the evidence. He still has to explain why any social service department should prefer to use its own care homes at an average cost of £283 a week, when the average cost of providing the same service in the private sector is £246 a week.
Let us move away from averages to the social service department in the constituency of the hon. Member for Stockport (Ms Coffey) and the report to which the hon. Gentleman referred. There we do not need to consider averages; we can consider specific facts in that local authority. It is true that it delivers good-quality services to some of its users. So it should: it spends 37 per cent. above standard spending to do so.
Furthermore, I should have hoped that the hon. Member for Stockport would want to know why that authority is placing people in residential care at £330 a week when, as the report shows, in that specific authority, there are private sector places available at £230, a price difference of £100 per week per place. Furthermore, this involves not only residential care, but day care and domiciliary services provision. The rate per hour for domiciliary services in Stockport is £10 for the public sector and £8 for the private sector. Let the Labour party explain why, against those facts, it maintains its blind commitment to the view that the public sector must always be protected.
The hon. Gentleman asked me where there are ideas for the development of vouchers in the planning for these services. The answer, among others, is in Bradford, an authority that I should have thought he might be interested in supporting. Bradford social service department wants to use vouchers to improve the services available to service users in Bradford. He just shot his own supporters in Bradford in the back.
I made it very clear that, after the legislation is changed, the onus of proof will be on social service departments that want to sustain provision of care, to show that the need can best be met through public sector provision. If they can discharge that burden, public sector provision


will of course remain an alternative. Against the barrage of facts about the real choice between the public and private sectors, however, the hon. Gentleman's blindness is the outstanding feature.
I welcome the hon. Gentleman's endorsement of the approach that the Government intend to take in reforming regulation of the sector, and I am grateful for his support of our plans for improving training for social workers working with children.
The hon. Gentleman's final point again reflected his approach. He said that he is in favour of a general social services council—a huge new quango, and an extra cost. Is he really suggesting that we should introduce compulsory registration for every one of the 1 million workers who engage in the delivery of social care? If he is really suggesting that, let him cost his proposal, and let him explain it to those who would have to pay for that huge and unnecessary bureaucracy.

Several hon. Members: rose—

Madam Speaker: That first exchange has taken more than 20 minutes. Therefore, I now want hon. Members to ask direct questions of the Minister, and I expect very brisk answers from the Minister.

Mr. James Couchman: My right hon. Friend will know that I chaired the Social Services Committee in the 1970s and 1980s, when I also chaired a health authority. He will also know that I was a member of the Central Council for Education and Training in Social Work. Will he say something about the future role of the director of social services, which is a statutory function and particularly important in the care of children in local authority care? I also welcome the initiative to co-ordinate the activities of health and social services, particularly in the regulation of homes.

Mr. Dorrell: I am grateful to my hon. Friend. The key point is that, within the legislation, the focus of the director of social services will increasingly be on assessing and commissioning care that meets the needs of the people in his area. Responsibility for managing services will increasingly pass to others, as will responsibility for regulation. The principal responsibility of the director of social services will be—as I believe that it should be—focused on assessing the need for care in the area covered by the social service authority and on meeting that need in the most cost-effective way open to him.

Mr. Peter Thurnham: I welcome the Government's long-overdue interest in social services. However, after all the recent abuse scandals, why are the Government not doing more to raise standards for those in care who are most vulnerable? Surely the Government should be addressing the issue of what they should be doing themselves. Why are they not doing more to reform community care law? Why do they not appoint regional ombudsmen to investigate cases of child abuse, such as the recent Rikki Neave case? What does this inadequate White Paper do to raise standards for those who are most vulnerable, especially children in need?

Mr. Dorrell: The White Paper focuses social service department management on assessing the need for social

care provision for people in the area, and on giving the director of social services and his staff the freedom to secure the services that are judged best to meet those needs. That is what it does. It focuses social service departments on quality and on value for money—which is where the focus of their activities should be.

Sir Peter Fry: Does my right hon. Friend accept, first, that the true picture in Labour-controlled Northamptonshire is totally opposite to that painted by the hon. Member for Islington, South and Finsbury (Mr. Smith)? We have a situation in which elderly people have been denied a place in the home of their choice, or that choice has been delayed for many weeks. Some of them have died before they have been admitted to a residential home.
Secondly, does my right hon. Friend accept that, at a minimum, about £2 million could have been saved and released to stop unnecessary cuts in social services? Not the Government but Labour-controlled Northamptonshire county council has been dogmatic and doctrinaire on the issue.
Finally, we should like to know—

Madam Speaker: Order. I asked for brisk questions. As many hon. Members are waiting to ask questions, will they each put one question, rather than three or four?

Mr. Dorrell: My hon. Friend's impatience, on behalf of his constituents, with the incompetence of Northamptonshire county council will repeat itself many times around the country, when my hon. Friends consider how local social service departments prefer to put people in expensive local authority accommodation rather than equivalent, but cheaper, private sector accommodation. The only effect of those decisions can be to provide less care to local people and waste the council tax payer's resources as a consequence. My hon. Friend is angry on behalf of his constituents and many of our hon. Friends will share his anger.

Mr. David Hinchliffe: As someone who spent nearly 20 years in personal social services before entering Parliament, I am sorry that the Secretary of State is putting the boot in to some dedicated, decent and hard-working professionals. He is doing so for blatant political purposes relating to his bid for the leadership of the Tory party. I do not think that he believes what he is saying. Where is his evidence that privatisation improves the quality of care? I can give him an example from my constituency, where a woman in a private care home choked to death because not one person on duty that day had basic first-aid training. Yes, it costs more to care for people in local authority homes, because the staff get basic first-aid training and other training, too. That is the difference.

Mr. Dorrell: The hon. Gentleman is simply letting his prejudices get the better of him. The public sector, not the private sector, is free of regulation. It is the public sector where costs are higher and standards too often have been found wanting. The Government are determined to be relentless in the pursuit of good-value, high-quality services, and that is what the Bill will provide.

Dame Elaine Kellett—Bowman: Does my right hon. Friend agree that all that he seeks to achieve in


the White Paper is already being achieved by the Abbeyfield Society, which provides extremely good value for money and charges £100 a week less than many other providers? It also moves people seamlessly from one form of care to another, virtually until the end of their days. Those who use its services are extremely happy, and it represents the best value for money that one could possibly get.

Mr. Dorrell: My hon. Friend refers to a valuable society that happens to be very active in my constituency. I can certainly vouch for the value of the service that it provides. The Abbeyfield Society and many other voluntary bodies play a key role in the provision of residential and day care facilities and domiciliary support. The Government are taking steps to extend the role of voluntary community support. The options that the Government are seeking to encourage are already being followed up by many local authority social service departments. The difficult question is why some are not. The Government are taking measures to ensure that every social service department applies those lessons, to the benefit of its local community.

Mr. Dafydd Wigley: Does the Secretary of State accept that value for money does not necessarily mean accepting the lowest price for a service? Does he further accept that private provision came on stream to provide choice? Some people choose to receive care from a public sector-provided home or facility. Will he guarantee, therefore, that no individual who chooses to receive care in a public sector home will be denied that choice?

Mr. Dorrell: What I give is the assurance that, when people provide money to the public sector through taxes, those responsible for managing the resources should have proper regard to securing good value in the services secured with taxpayers' money. I do not believe that the taxpayer will understand if authorities continue to buy places at £283 a week, when the same provision is available at £246 a week.

Mr. Patrick Nicholls: Given the attempts made this afternoon to misrepresent what my right hon. Friend has said, will he confirm that we are not talking about a reduction in quality? The same quality standards that apply to the public sector apply to the private sector. In many cases, the standards demanded of the private sector are higher. People in Devon can now look forward to real choice, and not having their choice of care in the private sector denied and abrogated by the local authority.

Mr. Dorrell: The White Paper guarantees an increased focus on quality in two respects. First, it ensures that public sector homes will have to meet the same regulatory standards that private sector homes already have to meet. It is a scandal that we should ever have regarded it as reasonable to exempt public sector homes from the standards expected of private sector homes. Secondly, by ensuring that we do not waste money, we shall have more money available to deliver better-quality services to people in need.

Mr. Dennis Skinner: Is the Secretary of State aware that I have heard nothing in recent months so

calculated to cause concern among people who work in the public sector and the social services and to make them turn out and vote against the Tory Government? They know what he is up to—he wants to cut services and cut wages to £1.50 or £2 an hour for all those who are getting above the minimum wage. Does he not realise that privatisation is rapidly becoming a dirty word? The Government privatised rain, and now they are proposing to privatise grannies.

Mr. Dorrell: This afternoon we have seen the hon. Gentleman reunited with his Front Bench. He need not worry about the veneer that covers the new Labour party, because the voice of old Labour came from the Opposition Dispatch Box this afternoon.

Mr. Peter Bottomley: I thank my right hon. Friend for his tribute to the staff in homes—public, private and voluntary. I advise him not to re-read some of the scandalous involvements in Greenwich over the past 20 years, where the deputy head of a home was also the branch secretary of a public sector union and exercised unhealthily close control over local Labour councillors. In his consultations, will my right hon. Friend pay attention to the stress on some residents and staff who find the prospect of change difficult to cope with?

Mr. Dorrell: I understand that any process of change causes uncertainty. That is why it is important, when contemplating changes such as those that I have anticipated this afternoon, to give people the absolute assurance that there will be increased safeguards of quality and an increased commitment to ensure that the resources available to social services are used to deliver high-quality care to those in need. The people in need suffer when those about whom the hon. Member for Bolsover (Mr. Skinner) was concerned have their excessive costs met. We have to deliver efficient, cost-effective services, because that is the way to respond to my hon. Friend's concerns, by assuring those who work in the sector and, most important, those who rely on its services that the services will be delivered cost-effectively and to a high quality.

Mr. Bruce Grocott: Given that for 18 years the Government have been driven by the dogma of privatisation, and given that in the past fortnight they have told us that they will privatise pensions, if they get the chance, and are now planning to privatise social services and force people into the private sector whether they like it or not, why should we or anyone else in the country be in the slightest doubt that, if the right hon. Gentleman and his friends had half a chance, the next target for their privatisation mania would be the national health service?

Mr. Dorrell: That is an irresponsible scare, because I have said clearly, categorically and repeatedly that that is not our policy. Our policy is to introduce the benefits of more flexible, high-quality provision into social care, as we have done over a wide range of other activities over the past 18 years. Just go and ask the people who use British Telecom services, or those who benefit from the increased efficiency of the electricity and gas industries: they have all benefited from the improved efficiency of those services. The Government seek to bring those


benefits to those who rely on the social care services. The hon. Gentleman is simply wrong about the national health service.

Mr. Iain Duncan Smith: Does my right hon. Friend agree that the key to his proposals is the fact that people should have the choice of quality that is affordable? Is not that demonstrated in the private as opposed to the public sector? Does not the Labour response demonstrate that, far from old Labour being in residential care, it is alive and well and receiving care in the community?

Mr. Dorrell: My hon. Friend is right. The most striking aspect of this afternoon's exchanges is the instinctive reaction of almost every Labour Member who has spoken. If there is any prospect of introducing greater choice, greater variety and greater opportunity to improve services, Labour Members' instinctive reaction is that it must be resolved through the public sector. That is the reaction of Dr. Pavlov's dogs. We get it every time from the Labour Benches.

Mrs. Alice Mahon: Will the Minister confirm that, if his plans become law, every public sector home will close down? What chance will there be for people to be cared for in the public sector once his proposals are implemented? May I reiterate what my hon. Friend the Member for The Wrekin (Mr. Grocott) said? If the people are unlucky enough to have the Conservative Government re-elected, the next privatisation will be the national health service, because that is at the bottom of this.

Mr. Dorrell: The hon. Lady is simply wrong. What we are doing is carrying on the policy that we have been pursuing since we introduced the community care legislation in 1990. We have seen a substantial growth in the provision of residential and nursing care in the public sector. The Government have delivered a huge increase in the range of services available to elderly people who need social care. The White Paper shows how that growth in the quality and range of social care provision for elderly people, and for every other user of social care services, can be extended in the future. The Labour party simply refuses to face any of the fundamental questions that confront those who care about the future of welfare provision in Britain.

Mr. Nicholas Winterton: My right hon. Friend made a statement with vision; much of what he said is already operating in my county of Cheshire. Does he accept that, if we are to involve the private sector to the extent that he outlined, it is important to gain public confidence in it, and there will have to be proper monitoring and a regulatory system, to ensure that the public have confidence in my right hon. Friend's proposals?

Mr. Dorrell: I agree with my hon. Friend that there must be proper safeguards, which is why we have had in the past the regulatory structure for the provision of residential care. I announced today the extension of that

regulatory function to cover domiciliary and day services, because I want to see the provision of those services by the private and voluntary sectors extended.
That is why the regulatory standards must be extended to cover public sector residential care. Many of the homes that have failed to meet the regulatory standards have been in the public sector. Homes that have exploited their freedom from regulatory standards are in the public sector. I announced the uniform regulatory approach contained in the White Paper, to ensure that everyone in residential care enjoys proper protection through regulation, which my hon. Friend says they should have.

Mr. Paul Flynn: Have not the Government proved again today that
Whom God would destroy He first sends mad"?
Is the Secretary of State really trying to contrive a Canadian-style wipeout in the general election? Does not he realise that the announcement will strike fear into the hearts of everyone who might be in residential care in the future—that is all of us, and almost everyone in the country—because they have seen the reality of what he calls cost-effectiveness: care on the cheap, with restricted diets, shared rooms and poor service from underpaid staff? Has he gone mad?

Mr. Dorrell: What I am doing is pursuing the policy that we have developed over the past 18 years, which has delivered the most radical extension of residential and nursing care for the elderly that has ever been seen in this country. I want the standards that people currently enjoy in the regulated private sector, and the opportunity for access to those services, to be extended more generally.
One of the biggest restraints on access to those services is the fact that too many authorities preserve and protect their own expensive and unregulated homes in preference to using public money to buy high-quality services in a competitive private sector. That sector has grown over the past 18 years and people can see for themselves the standards that are delivered. The evidence shows that the overwhelming majority of those homes have delivered a high standard of care, at a price that the public sector has not been able to match. That is why I want access to those services to be extended.

Mr. Charles Wardle: Is my right hon. Friend aware that in East Sussex the cost of care beds in the county council's homes is £152 per person per week more than in comparable available care beds in private sector registered care homes? The extra cost to the council tax payer is £4.7 million a year. Is not that ample reason for the proposals?

Mr. Dorrell: My hon. Friend makes his own point in an extremely cogent way. As I have said in answer to one or two other questions from my hon. Friends, that basic analysis is repeated time and again in social service departments the length and breadth of the country. I have introduced the White Paper today precisely to ensure that the questions raised by the figures cited by my hon. Friend are answered. Those figures simply demonstrate that the local authority is more concerned to defend its own institutional interest than to deliver services to people in residential care.

Rev. Martin Smyth: While there may be helpful proposals in the White Paper, I regret the fact


that the Minister has run away from introducing a social services council. The basis for that was given at least three years ago by people such as Sir William Upping; it would be self-funding and would involve in the end perhaps 1 million people, but in the beginning it should surely involve the key workers in social services. I regret that the opportunity has been missed.

Mr. Dorrell: The hon. Gentleman raises an important point. For the reasons that I gave earlier, I am not in favour of moving in the direction of universal registration of people who work in the social care sector. I am strongly in favour of working with employing authorities in both the public and the private sector, to make certain that there are proper standards, that those standards are enforced, and that there is co-ordination of the standards that are applied around the country. That is the route that we are taking. I issued a consultation document on the subject last autumn and I am certain that a focused approach to problems where they exist is a better way than a general registration system to address the concerns that the hon. Gentleman rightly expresses.

Mr. Keith Mans: My right hon. Friend's proposals will be widely welcomed in Lancashire, especially by those of my constituents who are currently resident in inferior-quality, high-cost, badly regulated Lancashire county council care homes for the elderly, who will be given a choice that they did not have before. They will also be widely welcomed by those of my constituents who should have care but are not getting any at all, because of the high-cost policies of the county council.
My right hon. Friend will also be interested to know that, judging from the people whom I saw standing outside No. 4 Millbank earlier this afternoon, the shadow Chancellor is already preparing to rubbish the statement of the hon. Member for Islington, South and Finsbury (Mr. Smith).

Mr. Dorrell: My hon. Friend may have seen Mr. Charlie Whelan doing his rounds. He may not always go into the studio, but we can reliably expect to hear his views about the performance of the hon. Member for Islington, South and Finsbury (Mr. Smith) and other Labour spokesmen.
My hon. Friend asked about the interests of people who rely on the social care provided by Lancashire county council social service department and other such departments the length and breadth of the country. He is right to say that the issue is one of quality, cost and the use of resources for those who currently do not get care because resources are wasted.

Mr. Ronnie Campbell: Will the Minister guarantee that the wages paid in the public sector will be transferred to the private sector? Will people get the same wages?

Mr. Dorrell: When an undertaking is transferred from the public to the private sector, the agreement comes under the normal regulations. That is how the system works, as the hon. Gentleman knows. It is interesting that he, the hon. Member for Bolsover and other Labour Members sitting on the Front Bench below the Gangway, are concerned only about the people who provide the services. We have not heard a word from them about the

interests of those who need social care. They are concerned only with the producer interest; they are not interested in those who need social care.

Mr. Edward Garnier: Does my right hon. Friend accept that private providers in Leicestershire, which we both represent, will be pleased with today's announcement? Is he aware that over the past few years, representatives of East Midlands C.A.R.E—the private providers consortium, which he and the Under-Secretary, my hon. Friend the Member for Chelmsford (Mr. Burns), have met—have complained about discrimination by the county council social service department in refusing to recommend private placements? Is it not significant that when the official Opposition are presented with a new idea, they are not capable of dealing with it, and change the subject?

Mr. Dorrell: The official Opposition always deal with the suggestion that we should introduce a more varied and flexible system by relying on the public sector alternative. That is their repeated reaction, whatever the subject. My hon. and learned Friend is right that, for the people of Leicestershire, as for the people of Lancashire, Northamptonshire and every county in England and Wales, this package provides more resources to deliver better-quality care for those who need residential, domiciliary day care services. We are interested in the better use of resources to deliver quality care. That perspective has been barely heard from Labour.

Mr. Neil Gerrard: May I draw the Minister's attention to paragraph 2.30 of the White Paper, which says that for authorities to continue to provide homes directly, they will have to prove that
there will be insufficient independent sector provision (either currently in existence or which could be developed in time)
to meet planned need? Does not that imply that a private sector provider could say that it intended to provide something, with no guarantee that such provision would ever come into existence and no way of judging quality or cost, because it would not yet exist? However, that would be enough to force local authorities to shut directly provided provision and close places that were being run successfully. People living in such places would be flung out.

Mr. Dorrell: The terms of that paragraph are clear. The local authority retains a power to provide residential or domiciliary services, if it is necessary to meet a need that will not be met by the non-statutory sector. That underlines the Government's view that the function of a social service department is to act as a safety net, to provide a floor, and to make certain that provision will be there, but not to interpose itself if the normal system can provide care to meet the need. That is the Government's view of the proper role of social service departments, and that is why we have introduced the policy in this way.

Mr. John Whittingdale: Is my right hon. Friend aware that in Essex, the policy of the Labour-Liberal Democrat-controlled county council of using its homes rather than independent sector homes will this year cost £10 million? Does he agree that


that is £10 million that could be used to provide extra care? Is not the policy of counties such as Essex an example of the triumph of dogma over common sense?

Mr. Dorrell: My hon. Friend is precisely right, and the figures that he quotes demonstrate the scale of resources currently being wasted by authorities that will not look for better-value solutions to their problems and which prefer always to fill their own homes.

Mr. Terry Lewis: Does the Secretary of State really believe that including old people in his closing-down sale will enhance their conditions? Does he think that the breweries that own many of the care homes in my constituency are better than local authorities at providing homes?

Mr. Dorrell: We are giving an assurance to elderly people, and others who rely on social service departments for social care, that we shall provide the resources and management disciplines to deliver proper high-quality services. The Labour party, driven by dogma, prefers to meet producer interests, rather than the needs of the people who rely on social service departments.

Several hon. Members: rose—

Madam Speaker: Thank you. We now move to the second statement.

Meat Hygiene Service

The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg): With permission, Madam Speaker, I will make a statement about the standards of hygiene in Great Britain's abattoirs. As my right hon. Friend the Prime Minister told this House yesterday, this is an issue that the Government take very seriously indeed, and I therefore welcome the opportunity to set out the facts.
Before going into any detail, I wish to emphasise that, before any red meat carcase goes into the food chain, it has to be individually stamped by Meat Hygiene Service inspectors as fit for human consumption. This is a critical safeguard, the existence of which is being ignored in the welter of comment appearing over the last few days.
Until 1995, standards and rules in abattoirs were enforced, with varying rigour, by over 300 local authorities. This was not a satisfactory state of affairs. For this reason, we set up the Meat Hygiene Service—a major reform that was strongly opposed by the Labour party and others. The MHS has been in operation for two years. In the first year, the MHS was required to carry out a review of all slaughterhouses in Great Britain to record standards, to establish a baseline for measuring future progress and to decide how to allocate resources for enforcement. This is the exercise to which I referred in my statement last week.
In order to raise standards within abattoirs, the MHS was set formal targets. In the first year, the MHS was set a target of increasing by 10 points the scores of those plants which were below 65 on a scale of 0 to 100. This target was met in full. For 1996–97, it was required to ensure that at least two thirds of the plants exceeded 65. It seems likely that this target will be met. Although these scores are a useful mechanism for driving up standards, I should again emphasise that all red meat must be passed fit for human consumption.
In addition, the MHS has taken a number of further steps. Thus, we have drawn up an operations manual which for the first time sets out a national standard on hygiene and, in the hands of MHS inspectors, is a vital tool for raising such standards. It specifically covers the steps to be taken so as to exclude "dirty livestock"—a policy which, as I said last week, we will shortly be reinforcing in graphic form.
Also, since concern has been expressed that supervision in some plants may be inadequate, the MHS has carried out a major review of supervision levels. As a result, the contracts now being placed with official veterinary surgeons will ensure that sufficient time is put in at each plant in 1997–98. Furthermore, the State Veterinary Service, which oversees the MHS, has carried out an audit of the MHS's methods in its application of both the operation manual and the scoring system. I will shortly be discussing with those responsible for the audit how best to carry forward their recommendations.
I should also mention the steps we have taken over the past year to strengthen the capacity of the Meat Hygiene Service. More than 450 additional staff have been assigned to the agency, and although these extra staff were appointed to apply BSE-related rules, they will of course reinforce inspection overall in abattoirs. Enforcement of the BSE rules themselves was tightened up sharply and,


as the House has been informed on past occasions, compliance with the rules in that specific area is now satisfactory.
What I have described is action already taken: I will now deal with action in hand. We have been working with the MHS on a joint action plan to drive standards upwards, targeting both the most serious problems and the plants with particular difficulties. The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Tiverton (Mrs. Browning), put the main specific action points to a meeting of leading meat industry representatives on 18 February.
First, the MHS will accelerate its work on defining standards for clean livestock—standards already defined in the MHS operations manual will be set out in the graphic document to which I have already referred. Secondly, it must be clearly understood that no carcase showing any signs of faecal contamination should be submitted for approval as fit for human consumption. Thirdly, we shall shortly start the publication of the findings of enforcement activity on a regular basis. Fourthly, principal official veterinary surgeons, who are the most experienced veterinary surgeons, will be given a larger role in managing OVSs and meat inspectors.
Fifthly, MHS staff will be given extra training in hygiene standards. Sixthly, OVS attendance will be stepped up at plants with poor hygiene scores. Seventhly, a new industry-Government working group will be set up to concert the drive to higher standards. Eighthly, the State Veterinary Service will intensify its audit activity, which will provide the basis for yet further action. I have told the chief executive that in appropriate cases infringement of the rules should result in prosecution: also, where appropriate, consideration will be given to the revocation of licences.
The knowledge which the MHS has now of meat hygiene is clearly relevant to Professor Pennington's inquiry into E. coli. It is important that the Pennington group should have access to this knowledge. Professor Pennington has been offered a statement, to be drawn up by the chief executive of the MHS.
I am well aware that public concern over meat hygiene has been heightened by the reports of the past few days. In my view those reports are misleading and do not take account of the important progress made over the past 18 months. I do not pretend that there is not scope for further improvement, but I can assure the House that the Ministry of Agriculture, Fisheries and Food, the other Agriculture Departments and the MHS have been and remain determined to drive up standards, and we are succeeding.
I turn now to the pieces of paper produced by the Opposition in recent days from various quarters and of various dates. They may yet produce more such documents—knowing them, I suppose that they will. I will not speculate as to the motives behind their production, but the proximity of a general election is probably one. However, those documents must be seen in the context of our policy to improve standards. Set in that context, they do not detract at all from the facts which are as I have just stated them to be.
The Meat Hygiene Service will apply the rules ever more strictly, and this requirement will be reflected in the Meat Hygiene Service targets for 1997–98. Each plant

now knows where its weak points are. Plants that are found repeatedly to have low standards will face progressively stricter attention from the meat inspectors and, as I have said, in appropriate cases prosecutions and licence revocations will ensue. Our purpose is to bring up our abattoir practice to the very best possible standards.
There is much public interest in this matter. My right hon. Friend the Prime Minister told the House yesterday that he was taking a personal interest in our efforts to drive up standards. I therefore intend to place a fuller version of this statement, containing additional detail about the measures to which I have referred, as an information paper in the Library of the House of Commons. I hope to do so by the end of the week. That will provide the basis for a more informed discussion than that which has taken place during the past few days.

Dr. Gavin Strang: These are serious matters. The House and the country are well aware of the importance of ensuring that health and hygiene controls in our slaughterhouses are maintained. We know that BSE is the most likely cause of new variant CJD, which is why it is so important to keep all the offal out of our food—the offal which can contain the BSE agent. We know that faecal contamination is a source of E. coli, which tragically resulted in more than 20 deaths in this country.
I advise the Minister that the House wants to know today what he knew about bad practices in our abattoirs, when he knew about them and what he did about them. [HON. MEMBERS: "Hear, hear."] The Minister referred in his statement to the Meat Hygiene Service review. As the Minister said, that was the report which the House addressed last week, but he seems to have forgotten the appalling breaches of hygiene highlighted in that report. Spinal cords were not removed, bovine specified material bins were unmarked and there was a major problem with faecal contamination.
Does the Minister remember that that report was not publicised? Indeed, it was not passed to Professor Pennington's inquiry on E. coli. The Minister seemed to say today on the radio that it was Professor Pennington's fault. Indeed, the Minister, who we assumed had left no stone unturned to drive up standards in our slaughterhouses, said that he himself had not seen the report. It was a comprehensive and devastating report, but it was summarised, it was sanitised and it was made available to only a few people in the industry.
Last Thursday, however, the Minister said, not to worry: he had made sure that everything was all right in our abattoirs and, although he had not seen the recommendations of the hygiene advisory team, he was confident that standards—I use his words—were "constantly improving".
But this week we find that, for the past nine months, the Association of Meat Inspectors has been warning Ministers and others that there are serious problems in our abattoirs and that in some respects in some places they have even been getting worse. Is the Minister aware that, on 11 February 1997, in a letter to the Parliamentary Secretary, the general secretary of the Association of Meat Inspectors warned that
there has been no improvement in standards of hygiene, and sadly faecal contamination appears to
be
becoming an acceptable infringement of the regulations"?


Does that point, and the other points in the letter, not worry the Minister? Surely he takes those criticisms seriously. It is no use his seeking to dismiss the general secretary's letters; if he does, I suggest that he has a look at the "Frontline Scotland" programme that was shown in Scotland last night, which again focused attention on some of these major and appalling breaches.
The Minister referred in his statement to the State Veterinary Service; rightly so. The State Veterinary Service has a crucial role in all these matters, especially in ensuring that we have the highest standards in our slaughterhouses. I hope that hon. Members know that we had just under 600 state vets when the Conservatives came to power. Now we have fewer than 300. In a written answer to me last week, the Minister confirmed that we have 289 state vets in 1997. Last year, we had 301, and there were 394 in 1995. Against a background of apparent concern about tackling the issue, we see the number of state vets continuing to plummet.
For the Minister, BSE means "blame someone else". He blamed the Opposition, he blamed Europe and he blamed the public for BSE. He blamed Mr. Swann, the editor of the hygiene advice team report, and today he and his colleagues have tried to blame the general secretary of the Association of Meat Inspectors. Does the Minister recognise that his "blame someone else" approach will not work? Every time Ministers come to the House and tell us that they have a grip on food safety, it quickly becomes clear that they do not.
Surely the Minister understands that food safety standards and hygiene in our slaughterhouses have been matters of concern not for months, but for years. It is almost a year since the Minister came to the House of Commons and made the statement that triggered the beef crisis. Yet there is a widespread public belief that those issues are still not being addressed. Is it not clear that we must establish an open and independent food standards agency? There is no place for secrecy in food safety.
Is the Minister aware that his statement this afternoon utterly fails to address adequately the issues raised by the Opposition? He is not tackling those problems effectively. There is no confidence in him or in his Government as far as food safety issues are concerned. We need a general election, and a fresh start with a new Government.

Mr. Hogg: The hon. Member for Edinburgh, East (Dr. Strang) used an awful lot of words to say remarkably little. In so far as he said anything of substance, let me deal with it.
First, of course this is a matter of very great importance: food safety is our paramount consideration. That is why we set up the Meat Hygiene Service. It is extraordinary that the hon. Gentleman should make the comments he did, when his party and the Liberal Democrats voted against the establishment of the Meat Hygiene Service. That was not a very responsible course of action.
Secondly, the hon. Gentleman went on at great length about standards not being improved in the past two years. That is simply untrue. One way—and it is only one—of measuring standards is by examining the hygiene assessment system scoring. In 1995, 111 abattoirs scored less than 50, and 374 scored less than 65. By 1997,

16 scored less than 50, and 116 scored less than 65. In other words, there has been a huge improvement. It is true that the number of abattoirs has fallen during that period. Nonetheless, the crude figures show a very substantial increase in standards.
The hon. Gentleman referred to Mr. Comrie. I am sure that the hon. Gentleman read the comments of the vice-president of the AMI that were reported in today's edition of The Times. Mr. Johnston said a number of things. Of Mr. Comrie's allegations, he said:
His letters are written on AMI headed notepaper, but as far as I know, they are his views, not those of the committee.
We have other anecdotal evidence of the rejection of Mr. Comrie's views. For example, I have a fax that was sent by Mr. Dennis Eyre to Johnston McNeill, chief executive of the Meat Hygiene Service. It states:
Dear Mr. McNeill,
I wish to notify you that, as a member of the Association of Meat Inspectors, I totally disagree with the content of the letter sent by the general secretary to yourself and Angela Browning. I can also refer to many plants where standards have improved vastly since the MHS took over. I cannot, though, name one plant that standards have dropped. I have consulted with the meat inspectors that work with me to enforce standards in meat plants for the Meat Hygiene Service and, so far, none can name a plant that is worse than under local authority control. We fully support you and the Meat Hygiene Service, and acknowledge the success with enforcing SBM control and hygiene.
It just happens that two days ago across my desk came another letter from a senior member of the Farmers Union of Wales addressed to Mr. Johnston McNeill. The letter, from Mr. Dolan, states:
Based on a number of visits to meat premises at irregular intervals, there is self-evident and continuing improvement in hygiene practice, quality of product, organisation of staff to the benefit of producers, consumers and operators.
The plain truth is that we knew that there were problems in the abattoirs. That is why we set up the Meat Hygiene Service. Since that time, we have pursued a consistent and continuing policy based on targets, which are being enforced, and on extensive discussions with the industry, conducted principally by my hon. Friend, which are designed to drive up standards, and which are having that clear effect.

Mr. Paul Marland: Does my right hon. and learned Friend agree that it is outrageous for members of the Opposition to prey on people's fears over the matter, pretending that they have a monopoly of concern for public health? It is blatant political opportunism. No one has an interest in trying to cover up the truth.
Will my right hon. and learned Friend confirm again that there have been substantial improvements in the slaughterhouses in this country since the Meat Hygiene Service was set up, and will he remind the general public that Labour and the Liberal Democrats voted against the introduction of that service? If they had had a shred of care about the matter, they would have supported in the House the setting up of that agency.

Mr. Hogg: My hon. Friend is wholly right. The plain truth is that we are approaching a general election, and the Opposition parties are less scrupulous than they ought to be in the way in which they are currently conducting themselves with regard to food safety. The farming


community, for example, will deeply resent what the hon. Member for Edinburgh, East (Dr. Strang) said in these exchanges; so will those responsible for enforcing high standards in the abattoirs. In a professional and determined way, standards in the abattoirs have been forced up, and those efforts have been denigrated and disparaged by the hon. Gentleman, who ought to know better.

Mr.Paul Tyler: Does the Minister recall agreeing with me on 30 January that the public no longer believe his assurances? He said:
it would he idle and foolish for me not to accept that the public do not have the degree of confidence that I would like them to have and which I believe would be justified, when Ministers and officials associated with Departments talk about food safety."—[Official Report,  30 January 1997; Vol. 289, c. 526.]
Will the Minister now acknowledge that, since that statement, his Ministry has been further discredited, and that the assurances have become increasingly incredible?
Does he further accept that the view of Professor Pennington, whom his Government appointed to look into the E. coli outbreak, is that the culture of secrecy in his Ministry and in Whitehall has severely damaged the credibility of the entire exercise? Does he accept the view of Professor Pennington that, had he seen the original Swann report on the failures of the hygiene standards of abattoirs—during the regime of the MHS, not relating to the previous regime—it would have been extremely useful to the professor's inquiry?
In view of the remarks that the Minister has just made about the general election, does he accept that the public will have no confidence in an internal Government inquiry into their own inadequacy in the context of a general election campaign? Will he now accept that the only solution to regain public confidence and restore confidence in the beef industry is to institute a full public inquiry?

Mr. Hogg: In view of what the hon. Gentleman has said, I look forward very much to his supporting the Government's proposals for a food safety council and a food safety adviser. I do, of course, recall what I said in the House before, and I accept—while very much regretting—that, over a long period, people have become sceptical about assurances that they have received from Ministers and others.
That scepticism is not justified, but it is a fact, and it needs to be recognised and acknowledged. I recognise and acknowledge it. That is why I decided that it would be sensible to introduce a food safety council and a food safety adviser to provide a stream of independent, authoritative advice that could be made public and, if that was necessary and justified, could be contrary to the position adopted by Ministers.
If the hon. Gentleman really wants to be constructive—which I doubt—I advise him to support us.

Mr. Richard Alexander: Is it not the case that, whether or not there was a report that my right hon. and learned Friend saw, if the Government had not set up the Meat Hygiene Service in the first place—against the wishes of the Opposition—we should not have had the report at all? Should not all parties now start

working together to improve standards in slaughterhouses, and stop playing party politics with people's fears about food?

Mr. Hogg: My hon. Friend is entirely right. The problem that existed before April 1995, when the Meat Hygiene Service was set up. was that the implementation and enforcement of all the rules and practices was in the hands of local authorities—some 300 of them. Because of that, it was not possible to gain an overall view of what was happening in abattoirs, let alone enforce a proper national standard. The creation of the Meat Hygiene Service has enabled us, for the first time, to get a grip on standards and drive them up. It is lamentable that the Opposition parties did not support us, and it is lamentable that they are now disparaging the efforts of those who are engaged in that task.

Mr. Nigel Griffiths: Does the Minister not realise that it is a valid criticism of the way in which he set up the Meat Hygiene Service that he must come to the House today with a further eight-point plan to improve abattoir and food safety, and that he has announced to the House that up to a third of abattoirs do not reach 65 out of 100 on his scale of proper standards? Is it not a disgrace that the public must put up with so many abattoirs not meeting the standards that they should have met? No wonder there has been criticism of the Minister's running of the Meat Hygiene Service.

Mr. Hogg: I think that I am being charitable, but the hon. Gentleman is simply missing the point. Others might suggest that he is deliberately evading it, but I will be kind and say that he is deliberately missing it.
We are engaged in a continuing process. Before 1995, there was no effective scoring, and no possible overview of what was going on. We have created a system that enables us to improve standards, which the Labour party and the Liberal Democrats voted against. In the first two years, we set targets for the improvement of standards, and those standards were met. We are setting yet tighter targets in the coming, third year. As I have said, it is a continuing process—that is why my hon. Friend the Parliamentary Secretary has had some 22 meetings relevant to the issue over 14 months—and we are driving up standards incrementally. That is how it is done.
I really think that the hon. Member for Edinburgh, South (Mr. Griffiths) should try to grasp the basic point. Every red meat carcase must be certified fit for human consumption by the meat hygiene inspector.

Mr. Michael Fabricant (Mid-Staffordshire): Is my right hon. and learned Friend aware of letters that I have written to the Parliamentary Secretary, my hon. Friend the Member for Tiverton (Mrs. Browning), about abattoirs in my constituency that have almost gone out of business because of the stringent controls exercised by his Department? Indeed, is he aware that there are abattoirs in the west midlands that have gone out of business because of those controls? Given the electioneering of the Labour party, who are playing on the natural fears of people outside this place, what impact does he think that the news generated by the Labour party over the past few days will have on lifting the European ban on the export of British beef?

Mr. Hogg: My hon. Friend makes at least two important points, the first of which is that a number of


abattoirs have gone out of business as a result of the ever-increasing standards demanded of them. My hon. Friend the Parliamentary Secretary has received a number of representations from hon. Members to safeguard particular abattoirs. That is a sign of how volatile the House sometimes is. The duty of my Department is to drive up standards, and that we will do.
On the second point, my hon. Friend makes a very sound observation. He is effectively saying that the irresponsible scaremongering will damage not only the meat industry in Britain but our standing in Europe. He is quite right. The fact that it is hysterical, irresponsible and ill-informed will not be understood in Europe: they will simply take it at face value. Those of us who know the quality of the observations from the Opposition Benches know that it is irresponsible, ill-informed and ill-intentioned, but unfortunately not everybody else will.

Mr. John Home Robertson: If the Minister wants to drive up standards, I suggest that he starts on the Treasury Bench. I put it to him that his responsibility is not just to react to crises, but to try to ensure that such fundamental problems do not start in the first place. Will he take it from me, not only as a Member of Parliament but as a member of the National Farmers Union for Scotland, that he has become a very serious liability to the industry and to consumer confidence in food produced in Britain? In view of those circumstances, will he do the honourable thing and resign—or will we have to wait until he is pushed?

Mr. Hogg: The hon. Gentleman clearly was not listening to what I said, or if he was, he steadfastly ignored it. The plain truth spelled out by the facts that I have given the House and the scoring to which I have referred is that there has been a substantial improvement in the past two years. Those are the facts. I do not particularly take credit for that— [Interruption] No; I accept that that is a matter for the Meat Hygiene Service, the State Veterinary Service and the operators of the plants, but to say that 1 am to be criticised for presiding over a period when we have driven up standards is patently absurd.

Mr. Edward Gamier: This afternoon's performance from the Labour party will have done nothing whatever to increase its stock among the farming community in my constituency.
Can my right hon. and learned Friend tell me how our present meat hygiene regime compares with that currently in force in the rest of the European Union and elsewhere on mainland Europe?

Mr. Hogg: We have just had a very interesting report from the European Commission about BSE and related matters in European countries other than Portugal and the United Kingdom. My hon. and learned Friend would find it deeply worrying.

Mr. Tony Banks: The people who died in Scotland were not scared to death: they were poisoned. In his statement, the Minister mentioned excluding dirty animals. It is almost impossible to exclude faecal contamination from slaughterhouses, because the

animals are standing in queues waiting to die. They can smell death, and when that happens, they urinate and defecate. If he was standing in a line waiting to die, he would fill his underpants as well, and probably has.
The Minister must realise that meat eating is bad for people's health. The people of this country should turn to vegetarianism before they turn as mad as the Minister.

Mr. Hogg: The House will have heard the hon. Gentleman's observation with some distaste.

Mr. Tony Marlow: My right hon. and learned Friend has set out a catalogue of great achievement in the past two years. Does he agree that standards of meat hygiene in United Kingdom abattoirs are higher now than they have ever been? Will he reinforce the point he made earlier, that meat hygiene standards in the United Kingdom are the highest in the whole of the European Union? Is it possible that those who have been busy leaking misinformation to the Labour party have an agenda wholly removed from that of public health and hygiene?

Mr. Hogg: As my hon. Friend knows, I do not always agree with him, so it is nice to be able to do so now. He is certainly right on the three points he made. First, standards in the United Kingdom are much higher than they were two years ago. Secondly, I venture to say that no country in the European Union has higher standards or enforces them more effectively. Lastly, we are approaching the general election, and many people, most notably Opposition Members, are behaving disreputably on this issue. This is a serious matter, but Opposition Members are not treating it as such.

Mr. George Foulkes: Is the Minister aware that the number of notified cases of food poisoning in Scotland rose from fewer than 1,000 in the late 1970s to more than 10,000 last year, with a similar increase in England? Did that not give him a hint that he should do something, such as abandon his dangerous dogma of deregulation?

Mr. Hogg: The hon. Gentleman has clearly—I rather like him, as a matter of fact—[HON. MEMBERS: "Withdraw."] That will damn his chances, but no matter. He and I will live with that: he will, most certainly.
The hon Gentleman has clearly not paid the slightest attention to what I have been saying in the past 20 minutes. Standards are improving owing to the policy initiatives taken by the Government and consistently opposed by the Labour party and the Liberal Democrats. It was because my right hon. Friend the Secretary of State for Scotland was so concerned about E. coli and related matters that he set up the inquiry under Professor Pennington to address the general issues that are the subject, at least in part, of this discussion.

Mr. William Cash: Does my right hon. and learned Friend agree that our first consideration should be the British consumer, the British meat producer and the British farmer? Does he accept that imports of foreign beef are coming into this country from places that have no proper inspection system? Their inspections are nothing like as good as those provided by the Meat Hygiene Service, even if it has had some teething


problems. Furthermore, does he agree that that is unfair to the British farmer and could be dangerous to the British consumer? It is essential that we place proper restrictions on the import of beef from other countries, some of which may have BSE and other diseases, before it causes a disaster here.

Mr. Hogg: It is a great pleasure to be able to associate myself with much of what my hon. Friend has said. He is entirely right about where our paramount duty lies. Our paramount duty is to the consumer—the consumer in the United Kingdom, obviously, but to the consumer.
My hon. Friend implicitly drew attention to the fact that there is almost certainly a higher rate of BSE in Europe than has yet been declared, and that controls such as we have in the United Kingdom are not in place in those countries. It is a serious problem, and it is being addressed by the European Commission. For example, it proposed an offal regime at the December Council, which we supported. That did not go through, but we will support the Commission when it again brings its proposal forward, because it is an important safeguard that is not yet in place.

Mr. Alex Salmond: Did the Minister say that he was asking the chief executive of the Meat Hygiene Service to prepare a written statement that the Scottish Office would pass on to Professor Pennington? The Minister said that the knowledge of the Meat Hygiene Service was clearly relevant to Professor Pennington's inquiry. If that is so, why were not the Swann report and the final report into slaughterhouse hygiene clearly relevant to Professor Pennington's inquiry, and passed on to Hugh Pennington?
On Thursday, the Minister implied that the matter was a Scottish Office responsibility. There was an immediate counter-briefing by the Secretary of State to say that it was the Minister's fault. Does not the Minister think that, against the background of 21 fatalities from E. coli in Scotland, people in Scotland will conclude that it was both Departments' and both Ministers' responsibility, and that the climate of secrecy that they have encouraged is responsible for some of the things that have been debated today?
Before he goes down the road of his junior Minister, the hon. Member for Tiverton (Mrs. Browning), and blames Hugh Pennington for not requesting the report, will the Minister reflect on the fact that there is much more confidence in Hugh Pennington than in any Minister on the Treasury Bench?

Mr. Hogg: It is for Professor Pennington, as the person presiding over the inquiry, to determine his lines of inquiry and the kind of information that he judges necessary. It has always been made plain to him that, if he needed specialist advice on meat hygiene, it was available to him. It is for him to ask for it. [Interruption] No, no: it is for him to ask for it. It has always been made plain that Departments stand ready to assist him.

Mr. Peter Viggers: Does my right hon. and learned Friend agree that, if there were to be a public inquiry, it would inevitably delay decisions on this important subject? Is he aware that I am certain that my constituents would wish to see the Government getting on

with the business of government and him taking vigorous and determined action to improve standards of food hygiene—which is exactly what he is doing?

Mr. Hogg: My hon. Friend is quite right. If there were a public inquiry, what would be decided is something like this—[HON. MEMBERS: "Oh."] I have the advantage of knowing facts. I am therefore able to say what the outcome is going to be, and it would be something like this: the decision to set up the Meat Hygiene Service was a very sound one; the decision by the Labour party and the Liberal Democrat party to oppose it was a very foolish one; during the past two years, there has been a substantial improvement in standards; there is more to be done, and the Government are gripping it. That is, broadly speaking, what an inquiry would say.

Mr. Tam Dalyell: Does the Minister or the Secretary of State for Scotland blame Mr. Ian Anderson, whose name has figured prominently in the press, for not having acted properly as a civil servant?

Mr. Hogg: I do not think that I have blamed anybody for anything in this connection.

Mr. Tom King: Is my right hon. and learned Friend aware that anybody who visited any slaughterhouse when environmental health officers had a responsibility in that area will be aware of the very serious variations in performance and standards? It is almost incredible that anybody who has any knowledge of slaughterhouses could have opposed the setting up of the Meat Hygiene Service, and the need for an urgent improvement.
Does my right hon. and learned Friend agree that the reality is that, given the threat and dangers we face—possibly from new strains of bacteria as well—and the natural problems of slaughtering cattle to which the hon. Member for Newham, North-West (Mr. Banks) referred, the matter will continue to be a serious challenge for the Government, whoever they are?
It does no service whatever to approach the matter on the basis of a letter from one individual in Somerset who was an environmental health officer and subsequently became involved privately with the meat inspection service. Although he may be the general secretary of the AMI, the letter appears to have been written in an individual capacity. That is not the right way in which to approach such a serious issue, which is slowly being turned into a political stunt. The matter is very serious, and will need continuing attention.

Mr. Hogg: My right hon. Friend has made a number of important points, of which I shall highlight two. My right hon. Friend, whose experience goes back very many years, is wholly right when drawing on his personal knowledge of abattoirs and practices before the setting up of the Meat Hygiene Service to say that nobody in 1995 who understood abattoirs and slaughterhouses would for one moment have opposed the creation of the Meat Hygiene Service. It follows that the Labour party did not have a clue then and does not have a clue now—which takes me to the second point.
The Labour party is mounting a serious campaign against the interests of food safety, confidence in British food and the British farmer on the say-so of Mr. Comrie,


who has the background that my right hon. Friend has indicated and whose letters—I repeat what his vice-president said—
are written on AMI headed notepaper, but as far as I know, they are his views, not those of the committee.
It is a slender basis for the hysteria that right hon. and hon. Members have sought to generate for political reasons.

Mr. William Ross: When he was opening his remarks today, the Minister said that he was talking about GB abattoirs. During answers to questions, he gave us all the impression that he was talking about UK abattoirs. If it was GB abattoirs, how do the abattoirs in Northern Ireland compare with the average in Great Britain, given that they all meet EU standards, and where are they on the scale? Given that a serious problem is now evident in abattoirs, is it the Minister's intention that the 450 staff kept on will be kept in work?

Mr. Hogg: In a matter of this sensitivity, I thought that it was prudent to confine myself to talking about those matters that relate to GB. My hon. Friends with responsibility for Northern Ireland would respond more directly to the hon. Gentleman.

Mr. Martyn Jones: The Minister sets great store by the Meat Hygiene Service, but will he confirm that no fewer than 45 inspectors have been subject to disciplinary proceedings for not enforcing the specified bovine offal regulations? Who inspects his inspectors?

Mr. Hogg: The hon. Gentleman does not understand the importance of what he has just said. He has just said that, yes, standards are being driven up and that those meat hygiene inspectors who are not enforcing the regulations are disciplined. It is part of the process of driving up standards.

Mr. Peter Hardy: Will the Minister consider this? Eighteen months ago, I wrote to his Department to point out serious problems which arose because contaminated poultry industry meat was not stained as red meat is; 12 months ago in the House I raised the matter and the Minister offered the most complacent reply, suggesting that there was not a problem; and, six months ago, he suddenly seemed to realise that there was a problem. There still is a problem. When will the Government do something about it?

Mr. Hogg: As I have been saying for the past 45 minutes, the Government have done a great deal to enforce and to bring about higher standards in abattoirs. We will continue that policy.

Mr. Ieuan Wyn Jones (Ynys Môn): Does the Minister accept that he does himself and the Government no credit by seeking to play down the level of genuine public concern about the standards in abattoirs and to deflect the criticism day after day about those standards? Given that fact and that the public will not have confidence in an internal inquiry by the Department, and as he has already

turned down a public inquiry, does he not accept at least that some form of arm's-length inquiry is crucial in this case?

Mr. Hogg: I began my statement by accepting that there is room for improvement. We have not tried to play down the existence of the problem. We have tried to set it in proper perspective. There was a problem way back in 1995, which we sought to tackle by the creation of the MHS. There remains a problem, albeit of a much lesser kind. We are embarking on a policy, we have persisted in a policy, we will continue with a policy of driving up standards and we are succeeding. Those are the facts. I remind the hon. Gentleman that every red meat carcase has to be certified as fit for human consumption by a meat hygiene inspector.

Mr. Colin Pickthall: I am interested in the Minister's league table mentality towards abattoir hygiene. In that system, at what point or at what score does meat hygiene become unacceptable? Does he think that someone who contracts E. coli would be pleased or mollified by being told that the meat had come from an abattoir at the bottom of the league table? How does the Minister reconcile the idea of league tables with commercial confidentiality, which his hon. Friend clearly could not do yesterday?

Mr. Hogg: I take the hon. Gentleman back to the critical point, which is that, in respect of every individual red meat carcase, there has to be certification by the meat hygiene inspector who inspects the carcase that it is fit for human consumption. That is a specific individual inspection and certification. Hygiene assessment scoring is a mechanism for trying to improve overall hygiene standards and is extremely valuable. That is why we place weight on it, but there is not a direct overlap between hygiene assessment scoring and the fitness for human consumption. That is a certification by an individual meat hygiene inspector based on a specific inspection of a specific carcase.

Mr. D. N. Campbell-Savours: Why is the Minister seeking to distort the words of Mr. Comrie? I have his letter here and it says:
It now appears, from reports I am receiving from members"—
so they are not his words, but the words of other people in his association—
that MHIs are being actively encouraged to ignore breaches of regulations and in some cases threatened if they try to take action".
That is a major allegation. Why does the Minister think that that responsible man, who has a significant position in the industry, would want to make such a statement—unless it were true?

Mr. Hogg: That question could be usefully asked to the vice-president of the association, who informed The Times:
His"—
that refers to Mr. Comrie—
letters are written on AMI headed notepaper, but as far as I know, they are his views, not those of the committee.
Hon. Members will recall that I gave other anecdotal evidence of the dissatisfaction felt by members of the Association of Meat Inspectors at what had happened.
In particular, I quoted at length from a fax from Dennis Eyre to Johnston McNeill supporting the Meat Hygiene Service in every major particular.

Mr. Gordon Prentice: Does the Minister recall writing to all hon. Members on 16 December to say that the controls in the abattoirs were being rigorously enforced? How does he reconcile that statement with what he told the House this afternoon—that there are lapses and the Minister is striving to improve standards? May I take the Minister back to the point that my hon. Friend the Member for West Lancashire (Mr. Pickthall) raised? What on earth is the point of having elaborate benchmarking, where abattoirs are supposed to strive to get beyond the figure 65, if no one knows at what point abattoirs are not doing the job properly? What is the point of benchmarking as explained to the House by the Minister?

Mr. Hogg: As to the first part of the hon. Gentleman's question, the letter that I wrote would have been directed at SBM—specified bovine material. It is now, I think, universally recognised, especially by the European Commission, that our controls are extremely effective and, it is plain, much more effective than any of those elsewhere in Europe, at least for the most part. I also recommend to the hon. Gentleman that he spends just a little time reading the regular monthly bulletin that we publish on the enforcement of SBM controls because he will find the contents extremely reassuring. He might care just to remind the House of them from time to time.

Several hon. Members: rose—

Madam Speaker: Thank you. I am bringing this to a close now.

Points of Order

Mr. Rhodri Morgan: On a point of order, Madam Speaker. I gave you notice of this point of order yesterday, and I have also given notice to the relevant Minister. It concerns events of last Thursday, 6 March, several hours before a planted parliamentary question was answered, and eventually printed in last Thursday's Hansard, at column 727.
Several hours before that answer was given, at about 2.15 pm, the press officer of the Conservative party in Wales was ringing up health correspondents of the media in Wales, telling them that she knew the contents of that parliamentary answer and how it would bale out the Dyfed Powys health authority, and offering the Under-Secretary of State for Wales, the hon. Member for Brecon and Radnor (Mr. Evans), for interviews.
Those events appear to indicate some collusion between the Conservative party in Wales and the Welsh Office—collusion which betrays the rights of the House. I should be grateful for your guidance on that matter, Madam Speaker.

Madam Speaker: I am grateful to the hon. Gentleman for giving me notice of his point of order. I have made inquiries myself, which indicate that the information contained in the answer to which he refers was indeed disclosed to the press a short time before it was available in the House. How that happened is a matter for Welsh Office Ministers to determine, but it should not have happened, and there must be no recurrence.

Mr. Tam Dalyell: On a point of order, Madam Speaker. I did not attempt to catch your eye during the statement by the Secretary of State for Health. May I raise a point of order that is not on a personal matter but concerns the traditions of the House, which many hon. Members imbibed when we were elected?
The tradition is that Ministers of the Crown, and indeed other hon. Members, should not launch specific attacks on local authorities and on their committees without supporting in detail the entire case. Does it do Parliament much good if we are seen on television to attack local authorities in some detail, without allowing them to put what in most cases amounts to a second side to the story? Usually there is another side to the coin.

Madam Speaker: I know of no tradition or convention preventing Ministers from criticising local authorities. Even if such a tradition or convention existed, it is not a rule of the House, and could not be enforced by the Chair.

Mr. Peter Viggers: On a point of order, Madam Speaker. I heard your announcement in response to the points of order on the use of electronic devices, and I very much welcomed it. However, there seems to be one issue which I think is important, although it is only a detail and may seem to be a small matter. You have said that it would not be practical to monitor the use of electronic devices that may be in a pocket or handbag or on a wrist. However, I think that it would be helpful if you were to tell the House, as an extension of your statement, that you would not be immediately minded to


call an hon. Member to ask a question or make a statement if you were to see him or her referring to an electronic device.

Madam Speaker: I should hope that I have sufficient common sense. I take on board the hon. Gentleman's point, but I hope that he might leave that matter to me.

Dr. John Reid: On a point of order, Madam Speaker. I am only too well aware of the pressures of business in the House and of the very difficult job that you have in allocating time to speak to hon. Members. However, you will understand that, 18 lives having been lost from E. coli in the Lanarkshire area, people will be wondering why Lanarkshire MPs did not have an opportunity today to question the Minister—particularly after his arrogant and indifferent display and apparent accusation of hysteria against many of the families who are still grieving.
Is it in order to ask you whether you are aware of any plans for further debate on this very serious issue, so that those of us from Lanarkshire who have lost not only constituents but friends can challenge the Minister over what can only be described as his incompetent, negligent and guilt-laden presiding at the Ministry of Agriculture—

Madam Speaker: Order. I am sure that constituents in Lanarkshire will understand that it is not always possible to call every hon. Member. I know that, because of his position, the hon. Gentleman has been called many times after such statements. I regret that I was not able to call all hon. Members on today's statement, but I think that we had a very good questioning of it.

Rights at Work and in Retirement

Mr. Andrew Mackinlay: I beg to move,
That leave be given to bring in a Bill to provide for rights at work, training opportunities and dignity in retirement.
I am proud to have the opportunity to move this Bill, which predicates some of the measures that will be introduced, very soon indeed, by the next Labour Government. The ideas that I shall express today are fully within the footprint of Labour's policy and programme, and the measures that my Bill would introduce would tackle the growing inequality in pay and career opportunities, the widespread injustice suffered by people—who are often diligent employees—in their place of work, and the increasing poverty of many retired people.
My Bill would also reaffirm the Government's moral obligation to tackle the great failures of the employment market. An unregulated employment market results in so many of our fellow citizens being denied the right to work, and so many of them who are in work, being denied dignity while they are there.
I make no apology for asserting that the issue is a moral one. Too many of our citizens are denied the opportunity to provide adequately for themselves and their loved ones and dependants. Too many people are not receiving a fair return on their labour, and cannot sell their ideas or their work at a fair price. Many people do not have an opportunity to maximise their skills and talents to benefit themselves and the common good. Unhappily, so many people in work have little or no job satisfaction or job security.
One of the features of the decline in trade union membership among the work force has been increasing numbers of accidents and hazards at work. Decades from now, students of history will look back in bewilderment and amazement at the past 18 years, in which a Conservative Government was indifferent to, and presided over, the shedding of our country's manufacturing base, a growing skills shortage, growing poverty and increasing burdens in social security payments. They will also note that, on 30 occasions, the Government attempted to launder and doctor unemployment figures. My Bill will ensure that unemployment figures are based on fact, not fantasy, and that they cannot be doctored to suit the party political purposes of an embarrassed Employment Minister.
My Bill would charge the Government with a duty to create jobs and to meet the skills shortage. It would require the introduction of training opportunities for all age groups, but particularly, and immediately, for the young unemployed. I am pleased that my hon. Friends, who will form the next Government, are committed to take immediate action to take 250,000 young people off benefits and to put them into work.
My Bill predicates the introduction of a national minimum wage, accepting the European working time directive, and, most importantly, providing people with a right to paid holidays. Although I recognise the need for a flexible labour market, I believe that the market must also match the demand for jobs with skills. Such matching is a matter in which the Government have a duty to intervene.
I want an end to discrimination based on age or disability in employment. Legislation providing inalienable rights against discrimination in employment based on disability or age is long overdue. My Bill would also ensure that there is a right to join a trade union, to organise a trade union and for trade unions to be recognised by employers.
The consequences of passing my Bill would be a war on unfair and arbitrary dismissal; there would be consultation instead of diktats in the workplace; and the callous disregard of workers, treated as if they were chattels, will be halted. One often recurring example of such disregard is people learning from news bulletins that their plant will be closed and their jobs transferred to another part of the UK or to another country. It has to stop. My proposals would place greater emphasis on conflict resolution by giving more power to advisory and conciliation services. Retired people, many of whom are on income support, would benefit from the new "pension entitlement" that is a hallmark of Labour's programme and policy.
The Bill is necessary to address the gross injustices affecting people on the margins of the job market. I represent one of the largest retail sectors in the United Kingdom. Numerous people have temporary or part-time jobs in West Thurrock retail park. All too often, they are on poverty wages. The Bill requires the Government to intervene in order to protect the most vulnerable from pernicious practices such as zero hours contracts, splitting jobs into bite sizes to ensure that workers' earnings are below the national insurance threshold, and the cynical dismissal of workers just before they qualify for employment rights. Something must be done.
Part-time work has increased by 30 per cent. since the last general election. Half the men in temporary employment are in temporary employment because they cannot find permanent work, and 50 per cent. of part-time employees earn less than £4 per hour. Some 800,000 of our fellow citizens earn less than £2.50 an hour and 2.5 million employees have no entitlement to paid holidays, so millions of children are denied the opportunity to enjoy a basic holiday once a year.
Many people—2.5 million women and 1 million men—are paid below the national insurance lower earnings limit, and rely on means-tested benefits. They and their families are vulnerable to long-term social exclusion.
It is time for Labour, but not just in the party political sense. Soon my hon. Friends will occupy the Treasury Bench, but when I say that it is time for labour, I also refer to the millions of people who make up the work force. In my view, the dice has been loaded against them for far too long. It is time for Parliament to take measures to ensure that people have dignity at work, a fair return for their labour, initiative and ideas, and dignity when they retire. Therefore, I seek leave to bring in the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Andrew Mackinlay, Mr. Gerry Sutcliffe, Mr. Kevin McNamara, Mr. Terry Lewis, Mr. Neil Gerrard, Mr. Paul Flynn, Mr. Don Dixon, Mr. Mike Gapes, Mr. Ian Davidson, Mrs. Ann Clwyd, Mr. Gordon Prentice and Mr. Ronnie Campbell

RIGHTS AT WORK AND IN RETIREMENT

Mr. Andrew Mackinlay accordingly presented a Bill to provide for rights at work, training opportunities and dignity in retirement: And the same was read the First time; and ordered to be read a Second time upon Thursday 1 May, and to be printed [Bill 134].

Representation of the People

The Minister of State, Home Office (Miss Ann Widdecombe): I beg to move,
That the draft Representation of the People (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.

Madam Speaker: I understand that with this it will be convenient to discuss the following motions:
That the draft Representation of the People (Scotland) Amendment Regulations 1997, which were laid before this House on 13th February, be approved.
That the draft Representation of the People (Northern Ireland) (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.
That the draft Local Elections (Northern Ireland) (Amendment) Order 1997, which was laid before this House on 13th February, be approved.
That the draft European Parliamentary Elections (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.
That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.

Miss Widdecombe: In so far as anything relating to voting can be judged uncontroversial at the moment, I believe that the six sets of regulations before the House are uncontroversial. They seek to introduce three improvements into arrangements relating to absent voting at local government, parliamentary and European parliamentary elections.
One set of regulations introduces the changes for local government and parliamentary elections in England and Wales, and a second set extends the arrangements to European parliamentary elections in those countries and Scotland; three separate regulations apply the changes to elections in Northern Ireland and one set deals with parliamentary and local government elections in Scotland.
The most important measure relaxes the deadline by which electors must apply if they wish to vote in elections by post or by proxy. Under the Representation of the People Regulations 1986, the deadline is noon on the 13th working day before polling. That is a very tight timetable for electors to meet, and every election produces complaints from electors who have missed the deadline and so cannot get a postal or proxy vote.
The draft regulations relax the deadline from noon on the 13th working day before polling to 5 pm on the 11th working day, giving electors an extra two and a half days to get their applications in. It is a proposal on which the main political parties were consulted at official level some time ago, and it was welcomed by them.
The relaxation is drafted to come into force seven days after the regulations are made. That means that they will be in force for the general election and I believe the additional flexibility for electors to secure an absent vote where they need one will be widely welcomed by electors and candidates.
The draft regulations also introduce two further changes relating to the attestation of certain applications for an absent vote. First, they increase the number of nurses who can attest applications for an absent vote made on grounds

of physical incapacity. At present, any elector wishing to have an absent vote on a continuing basis on grounds of a physical incapacity that prevents his attending the polling station must have his application attested. That also applies to applications made after the normal closing date on grounds of unforeseen health problems. The Representation of the People Regulations 1986 permit doctors, nurses and Christian Science practitioners to make such attestations, but only first-level nurses are currently empowered to attest applications.
We have been advised by the Royal College of Nursing, the NHS executive and the United Kingdom Central Council for Nursing. Midwifery and Health Visiting that the arrangements are now too restrictive. Their unanimous view is that any registered nurse should be able to make such an attestation; registered nurses are professionally competent to do so and accountable for their actions.
The regulations therefore provide for any registered nurse to make the attestation that some electors require. That will make it easier for electors to get their applications attested, and thereby to secure their absent vote with no loss of professional reliability.
Finally, the regulations give effect to another proposal that the main political parties have welcomed at official level. Very occasionally, alleged abuses have come to light of the procedures for obtaining the attestations to which I have just referred. Some applications for absent votes must, as I have said, be attested by doctors, nurses or Christian Science practitioners. One or two cases have been reported of batches of applications for a number of constituents being attested by the same person, who seems to have little or no knowledge of the applicants.
While the Govenment are keen to ensure that everyone who needs an absent vote should get one with the minimum inconvenience, we must also guard against the potential for abuse which inevitably creeps into any absent voting arrangements. The regulations therefore tighten up the procedures by requiring any doctor, nurse or Christian Science practitioner who attests an application for an absent vote to confirm on the application form that he or she is treating or giving care to the applicant for the incapacity which forms the basis of the application. That change is not reflected in the relevant Northern Ireland draft regulations, as the procedure I have described is already in force there and is considered to work well [Interruption] I am sorry that I am boring the hon. Member for Clydebank and Milngavie (Mr. Worthington), or perhaps he is just a little tired.
These two measures on attestation are drafted to come into force in Great Britain three months after the regulations are made. That will allow time for a period of notice of the changes to be registered with electoral administrators and for amended forms to be printed centrally and ordered by electoral registration officers who obtain their stocks from the Stationery Office.
In Northern Ireland, where the statement of treatment already applies, the sole change of practice in attestation will come into force after seven days. The three-month delay in implementation in Great Britain will not affect any elector's ability to obtain an absent vote at the general election. Anyone needing one should be able to get one on a one-off basis, and, as I have said, they will have longer to do so than at present.
I have mentioned one small difference between the provisions before the House relating to Northern Ireland and those for the rest of the United Kingdom—the existing provision in Northern Ireland for certain attestors to indicate that they are treating or giving care to the applicant. That is now being applied to the rest of the United Kingdom.
There is another small difference. The Northern Ireland provisions update existing electoral law to take account of changes in the definitions of residential care and nursing homes in Northern Ireland. The current definitions in Northern Ireland electoral law were repealed by the Registered Homes (Northern Ireland) Order 1992 and consequently the electoral law of Northern Ireland needs to be updated. That is done by the regulations and the order affecting Northern Ireland. That technical updating does not apply to the rest of the United Kingdom.
The two sets of European parliamentary regulations before the House merely apply to European parliamentary elections the provisions that I have just described for local government and parliamentary elections. One set of the European parliamentary regulations extends the provisions to England, Wales and Scotland, and the second set extends them to Northern Ireland.
The regulations are uncontroversial. They increase the freedom of electors to obtain a postal or proxy vote in time for the general election. That should increase the total number of electors able to vote, which must be welcome in a democracy. The regulations introduce two sensible and targeted changes in arrangements for continuing absent vote applications to be attested. The first further extends flexibility for electors and the second closes off a possible avenue of abuse. I therefore commend the measures to the House.

Mr. Doug Henderson: The right hon. Lady thought that we were bored by her speech. In no way were we bored; we were stunned by her relaxed composure, replacing the fighting harangue that we normally have to deal with. It is most unusual for the right hon. Lady and me to deal with an uncontroversial issue.
I endorse the proposals. I think that my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) may wish to say a few words about Northern Ireland when winding up.
We support regulation 4(3) that applies to England and Wales and to Scotland. Following the representations of the medical profession, it is welcome that any registered nurse should be allowed to attest to someone's physical incapacity. We also support regulations 4(4) and 4(5), which require a medical practitioner, a nurse or others who attest, to say that they are treating the patient. Is it the right hon. Lady's intention that, provided one practitioner in a group practice had dealt with the person on a medical basis, any similarly qualified member of that practice would be able to attest? I am happy to give way now, or the right hon. Lady may wish to reflect on that question and deal with it at the end.

Miss Widdecombe: indicated assent.

Mr. Henderson: I am getting an indication that the answer is yes.
I support the aim of regulation 5, to extend our democracy by allowing a greater period for people who are going to be absent to qualify for a postal vote.
The regulations were based on a Home Office working group report on absent voting. It is unfortunate that there has not been time in this Parliament to deal with some of the other issues covered in the report. All hon. Members are concerned about the fact that so many people are disqualified from voting in a general election. The Library has estimated from the 1991 census that about 2 million voters will move during the 23½ weeks between the qualifying date for the electoral register—10 October—and the beginning of May. Many of them will move a short distance, and it will be relatively easy for them to make their way to a polling station, but the Library estimates that around 900,000 of those voters will move to a different local authority district. Very few of them will end up voting in a general election. That is a substantial proportion of our population disfranchised. We need to consider that further in the next Parliament.
There are some worries that a rolling register could be abused if it was not possible to check addresses on it. In the next Session, Parliament should consider whether a rolling register could be added to regularly so that people would not be disqualified. Other checks may also have to be included, in addition to the normal checks to prevent abuse. We would do our democracy a just service by introducing new regulations on that in the next Parliament.

Mr. Andrew Robathan: I should like to raise an amendment that should be made to the regulations but which, I regret, is not being made. I have raised the issue with Home Office Ministers three times during the past five years.
The names Ian Gow, Airey Neave and Robert Bradford will be well known to hon. Members. They have all been murdered by the IRA since 1979. The devices that murdered the first two were planted at their homes. It is unwise of the House to demand that candidates in parliamentary and other elections should give their normal home address on nomination papers and ballot papers. It is said that that furthers democracy, but I do not understand how the death of an hon. Member furthers democracy.
A party other than the Conservatives may be in government at some stage, although I would regret that. That party would then discover the problems. I understand that Lord Mason still has protection against the IRA. I recall Lord Fitt having to hold off a gang of people with a revolver at the top of his stairs. In all those cases, terrorist organisations have attacked hon. Members. Ulster Unionist Members will be only too well aware of the threats that they live with every day.
We should not make a gift to terrorist organisations—the IRA or others. There are other terrorist organisations that might want to kill hon. Members. It is foolish for us to have to give our home addresses. That is a gift to a terrorist who wants to find out where an hon. Member lives. A terrorist will baulk at the idea of having to ferret around for the information. Of course, anybody can find where any of us lives if they try hard enough, but if we make it more difficult, attacks are less likely. I regret that it is likely that there will be further attacks.
Before the last general election, the then Home Secretary, my right hon. Friend the Member for Mole Valley (Mr. Baker) tried to introduce regulations on this subject. The Liberal Democrats—notable on this occasion, as often, for their absence—said that that was unacceptable and would undermine democracy. I say again that I do not understand how the death of any hon. Member from whatever party improves democracy. I very much hope that, in future, we will amend the regulations so that candidates do not have to give their home addresses.

Madam Deputy Speaker (Dame Janet Fookes): I think that the hon. Gentleman has sat down. I was about to make to him a point that I shall make to the House. His comments went beyond the regulations before us. Although I do not mind passing references that go beyond the regulations, the House would be ill advised to dwell on them.

Mr. William Ross: This is the second tranche of these little orders to come before us in the past 10 days. The first few relating to Northern Ireland were considered last week, and dealt with the sums that candidates may spend. I noticed that, in that debate, everybody seemed to miss the fact that, in a proportional representation election in Northern Ireland, a party that puts up five or six candidates has five or six lots of expenses to play around with. Those on the two Front Benches should keep that in mind when they complain about the sums that are sometimes available.
I have also noticed, from last week's regulations and from today's fistful, that we seem to be getting into a complex area, with constant reviews and updatings of electoral law. From what the Minister has said, some of the measures that we are passing will not take effect in time for the general election. I therefore suggest that serious attention should be given in the next Parliament to the consolidation of electoral law in one easily obtained book, which is updated, so that we do not have to plough through one little regulation after another for years back.
In last year's election, it was impossible to obtain certain elements of electoral law, and some people standing in the election did not know what the law was. I see that the Minister of State, Northern Ireland Office, the right hon. Member for Westminster, North (Sir J. Wheeler), is on the Government Front Bench. I hope that the Government will take on board the need to consolidate and reprint the regulations quickly after the general election.
The Minister said that the change of time scale for postal vote applications was necessary because the time was tight for electors. We all appreciate that—in view of the number of complaints that every political party must deal with. I do not know whether the general election will be on 1 May, but I understand that there is to be a local election on that day. The local election in Northern Ireland, however, is three weeks later, so we shall have to start electioneering at the beginning of April and be at it for nearly two months. We shall all be rather weary of it by the time it ends. One thing is certain: all those who miss the postal vote the first time round will want to vote at the local election, so we at least have two bites of the cherry. I am therefore grateful for the extra two days.
I hope that the Minister has reflected on the fact that, although we shall make matters easier for electors, we shall make them more difficult for staff of the returning officers. Rather than saving money, the tighter time scale means that we shall have to employ more people in electoral offices.
I listened with interest to what the Minister said about the changes in the attestation. The application forms will clearly be different and the changes with regard to nurses' qualifications will have an effect. One sometimes wonders whether all the changes are beneficial. I hope, therefore, that nurses' names, addresses and qualifications will be put down and be checkable.
On the Local Elections (Northern Ireland) (Amendment) Order, will the Minister clarify who will be registered? When we are dealing with nursing and residential homes, will the manager of a home where electors are resident have to register, or will the manager of the group of homes—certain firms now run a large number of homes—be considered to be in charge of the home? To whom does the legislation apply? We urgently need that information, which applies throughout the United Kingdom.
The Minister pointed out that one of the changes to the British legislation simply brought this side of the Irish sea into line with legislation in Northern Ireland. Is it not time that electoral law for general elections was exactly the same throughout the kingdom? Could not consolidation of the legislation be done with that in mind? We are sometimes weary of the little differences that appear. We see no good reason for them, and I therefore hope that the Government, or their successors, will take on board what I am saying and do what is necessary to bring legislation in Northern Ireland and Great Britain into line.
The Representation of the People (Northern Ireland) (Amendment) Regulations are clearly different from the regulations that apply to England, Wales and Scotland. I wondered why, but the Minister clarified that matter in her opening remarks. Will she confirm that, despite the different wording in the regulations that apply to Northern Ireland, they have exactly the same effect when it comes to the practicalities of elections?
I confess that I read the Great Britain regulations 2(2) and simply could not understand. It seemed to say that there was a delay of three months. Does that allow regulation 4(4) to come into effect immediately? The first part of the paragraphs seemed to say one thing but the second part seemed to say something different. Will the Minister clarify that?
I very much regret that the regulations do not oblige the chief electoral officer of Northern Ireland to keep a record of persons refused a ballot paper because they do not have proper identification. That bone of contention with the electors and political parties in Northern Ireland has run for years. Every time we raise it after an election at which a large number of people have complained, we are told, "Oh, those people might go away and come back." Our experience is that if people are refused a ballot, paper because they do not have the correct piece of paper in their hand, they do not come back. We must therefore look once more at having a single piece of identification—an identity card—that could be used across the board.
May I say to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who spoke on behalf of the Labour party, that, although a rolling register is an


attractive idea at first sight, if he lived in Northern Ireland he might take a distinctly different view because of the activities of Sinn Fein-IRA. I assure him that if one opens the door to frauds that could be perpetrated in one part of the kingdom, the door does not close; it opens right across the kingdom.

Mr. Harry Barnes: One of the advantages of the electoral registration system in Northern Ireland is that there is a full canvass for checking that the correct people are on the register. If that were extended to England, Wales and Scotland, the registration figures there would increase considerably. That means that a rolling register would not have the serious implications for Northern Ireland that the hon. Gentleman fears.

Mr. Ross: I agree with the first part of the hon. Gentleman's comments, but not the second. We examined those matters at the meetings some parties attended in the Home Office. I was a representative of my party. The Minister is well aware of those meetings, at which a number of serious objections were thrown up. She might like to expand on them so that the hon. Gentleman is better informed.
I agree with the hon. Member; the registration process in Northern Ireland is much better than that in the rest of the UK. It is carefully done and people are followed up. The electoral officer claims that his register is 98 per cent. accurate. While that is impossible to prove, it is much better now than when he started doing it.
The political parties in Northern Ireland, albeit in a smaller society, seem to be much more effective at getting their people on the register than political parties in Great Britain have ever been, so perhaps we have a lesson or two to teach this side of the water yet.

Mr. Tony Worthington: I want to speak on similar lines to other hon. Members in welcoming what are basically sound but small, modest reforms. I, too, am disappointed, especially from the Northern Ireland point of view, that the Government have issued no general papers on developments within the electoral process to let us know how they see the electoral system developing. The Labour party believes that the need to safeguard against abuse is considerable.
The regulations do not address the central issue that concerns people—electoral abuse. The hon. Member for Foyle (Mr. Hume) recently accused Sinn Fein of stealing votes. He was following what the hon. Member for Belfast, West (Dr. Hendron) has been saying for a long time: that personation in Northern Ireland is a serious problem. It is important to follow that through and give maximum backing to the chief electoral officer, Mr. Bradley, in his constant battle to make the system fairer.
Mr. Bradley hopes that computerisation, linked with the appropriate software, will improve these regulations and others, because the ways of abusing the system in Northern Ireland and elsewhere are numerous. We shall write to each of the parties in Northern Ireland asking for their suggestions on how to safeguard the system. The Government should have been more active on that matter.
As the hon. Member for East Londonderry (Mr. Ross) said, there will be a tension between the desire to ensure that the procedure is the same as in the rest of the United

Kingdom and the recognition of the particular tensions in Northern Ireland. He mentioned carrying identification at the polling booth. There is no doubt that the health card is the weak link.

Mr. William Ross: I must disabuse the hon. Gentleman of that idea: the weak link is any document that does not have a photograph on it, which is most of them.

Mr. Worthington: It so happens that the health card does not have a photograph on it, and I am talking about that weakness and the rumours about the capacity of various organisations to churn out health cards that the polling agents cannot identify as false. The effectiveness of the card would be immensely strengthened even with the addition of a signature. There are complications, however, and any change would cost money.
It is not only a matter of personation. There are weak links at each stage in the system. For example, there are huge disparities in the number of postal votes in different constituencies. At the last general election, one constituency had nearly 4,000 postal votes, or 8.2 per cent. of the votes cast; another had only 335, or 0.8 per cent. of the votes cast. That may reflect geography or levels of political organisation, but in approving the orders we ought to be able to be confident that there are benign explanations of the huge differences. It is extremely important to know that only those who are entitled to vote do so—and only once—especially when results are close.
We welcome the proposals. They seem to be safe and important changes, but they are extremely modest in relation to what is needed to appraise whether the system in Northern Ireland is satisfactory. There has been plenty of practice with elections in Northern Ireland, so we should have had papers before us stating whether the system is working fairly.

Miss Widdecombe: This has been a short but interesting debate, and there has been a large measure of agreement across the parties. Almost all the points raised were more to do with what was not in the orders than with what was. I shall ensure that all the points are drawn to the attention of my right hon. and learned Friend the Home Secretary, and I am sure that we shall consider whether any further action needs to be taken.
I shall answer one or two of the points that were made. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) spoke about 2 million voters moving between certain dates, and said that many would lose their vote as a result. That is not necessarily so; they can still vote by post or by proxy at their old address. The extension of time will help with that.
The hon. Member for East Londonderry (Mr. Ross) said that the extension of time might be good for electors, but would be very difficult for electoral registration officers and those who had to implement the system. We took detailed advice before deciding on the two-and-a-half-day extension; we were advised that that was the maximum extension that it was safe and practicable to make. We believe that we have found a balance between looking after the electors and looking after those who have to put the requirements of the election into effect.
A rolling register would be much more expensive and more bureaucratic, and we have decided that further work on it would not be the highest priority when considering further reforms that might have to be made.
The hon. Member for East Londonderry mentioned consolidation. That took place in 1983, and further detailed regulations have to be made simply to keep pace with and clarify developments since that time. He also asked, quite fairly, whether the Northern Ireland regulations were the same as those for the rest of the United Kingdom. The answer, as I said in my introduction, is yes, except where Northern Ireland already has a slightly different arrangement that cannot easily be accommodated or equalled.
It was suggested that the Northern Ireland method of a complete canvass should be extended to Great Britain to get more people on the register. In fact, many electoral registration officers in Great Britain conduct a canvass of household doors, and it is down to those officers to decide the best method for themselves, so the concept of a complete household canvass is not unique to Northern Ireland.
The hon. Member for East Londonderry also spoke about the Northern Ireland electoral offices not keeping a record of people turned away from polling stations because they did not have the right identification. In fact, a leaflet is delivered to every one of Northern Ireland's 600,000 households before an election, detailing the documents that are legally required to be presented in order to obtain a ballot paper. We have no reason to believe that a significant number turn up without the correct documentation.

Mr. William Ross: The right hon. Lady is saying what the electoral officers tell her, but will she not listen to what the political parties say? We have evidence that many people are turned away and do not come back.

Miss Widdecombe: That is a serious point, and if the hon. Gentleman believes that there is substantial evidence

for it, he should let us know. We have to go on the evidence before us, which suggests that that is not the case. It is not that it does not happen, but that the number is not substantial.
My hon. Friend the Member for Blaby (Mr. Robathan) asked about addresses on ballot papers. I understand his point of view, and I have some sympathy with it. I shall ensure that it is drawn to the attention of my right hon. and learned Friend, but it is not a matter than I can immediately encompass in the regulations with which we are dealing today.
I hope that I have dealt with the main points that were raised in the debate. I shall of course read Hansard carefully and answer any further points of detail in writing.

Question put and agreed to.

Resolved,

That the draft Representation of the People (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.

Resolved,

That the draft Representation of the People (Scotland) Amendment Regulations 1997, which were laid before this House on 13th February, be approved.

That the draft Representation of the People (Northern Ireland) (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.

That the draft Local Elections (Northern Ireland) (Amendment) Order 1997, which was laid before this House on 13th February, be approved.

That the draft European Parliamentary Elections (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.

That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1997, which were laid before this House on 13th February, be approved.—[Miss Widdecombe.]

Orders of the Day — National Health Service (Primary Care) Bill [Lords]

As amended (in the Standing Committee), considered.

New clause 1

DUTY OF REGISTERED OPTICIANS TO REFER CERTAIN PERSONS TO REGISTERED MEDICAL PRACTITIONERS

'.—(1) Section 31 of the Opticians Act 1989 (matters with respect to which the General Optical Council may make rules) is amended as follows.

(2) In subsection (5) (power to make rules requiring registered optician to refer persons to registered medical practitioners except in certain circumstances), for the words from "except" to "take the prescribed steps" substitute "except—

(a) in an emergency,
(b) where that person is consulting him for the purpose of being given treatment in accordance with rules under subsection (1)(d) above, or
(c) in such other cases as may be prescribed,
take the prescribed steps".

(3) After subsection (5), insert—

"(5A) Rules made by virtue of subsection (5)(c) may impose conditions which must be satisfied if the exception for which those rules provide is to apply." '.—[Mr. Malone.]

Brought up, and read the First time.

The Minister for Health (Mr. Gerald Malone): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss also the following: New clause 9—Provision of special ophthalmic services under a pilot scheme—

'.—(1) This section applies to any pilot scheme under which special ophthalmic services are provided.
(2) An agreement which constitutes, or is one of the agreements which together constitute, a pilot scheme may be made by an authority only with one or more of the following—
(a) an NHS trust;
(b) a person on an ophthalmic list;
(c) an NHS employee or a pilot scheme employee;
(d) a qualifying body;
(e) an individual who is providing special ophthalmic services under that or another pilot scheme.
(3) In this section—
"NHS employee" means an individual who, in connection with the provision of services in the health service, is employed by—
(a) an NHS trust;
(b) a medical practitioner whose name is included in a medical list; or
(c) a medical practitioner who is providing personal medical services in accordance with a pilot scheme;

ophthalmic list" has the same meaning as in section 4A(3) of the National Health Service and Community Care Act 1990 or section 17AA(3) of the 1978 Act;
pilot scheme employee" means an individual who, in connection with the provision of special ophthalmic in accordance with a pilot scheme is employed by an individual providing those services;

qualifying body" means a company which is limited by shares all of which are legally and beneficially owned by persons falling within paragraph (a), (b), (c) or (e) of subsection (2).'.

New clause 10—Charges for special ophthalmic services—
'.—(1) In the 1977 Act, after section 78A (as inserted by section 26 above), insert—
"Charges for special ophthalmic services under section 28C
78B. No charge may be made for special ophthalmic services provided under section 28C arrangements.
(2) In the 1978 Act, after section 70A (as inserted by section 26 above), insert—
"Charges for special ophthalmic services under section 17C
70B. No charge may be made for special ophthalmic services provided under section 17C arrangements.".'.
Amendment No. 77, in clause 1, page 1, line 14, after 'authority)', insert or
(c) special ophthalmic services are provided (otherwise than by the authority)'.
Amendment No. 78, in page 1, line 16, after 'services', insert 'or special ophthalmic services'.
Amendment No. 79, in page 2, line 34, after 'Ace, insert '; and
special ophthalmic services" means sight testing and related services provided to persons over the age of 60; and "sight testing" has the same meaning as in section 36(2) of the Opticians Act 1989'.
Amendment No. 80, in clause 21, page 12, line 21, after 'Authority)', insert', or
'; special ophthalmic services are provided (otherwise than by the Authority)'.
Amendment No. 81, in page 12, line 24, after 'services', insert 'or special ophthalmic services'.
Amendment No. 82, in page 13, line 25, at end insert
';and "special ophthalmic services" means sight testing and related services to persons over the age of 60; and "sight testing" has the same meaning as in section 36(2) of the Opticians Act 1989;'.
Amendment No. 83, in page 13, line 40, at end insert—
'(ca) in the case of an agreement under which special ophthalmic services are provided—
(i) a person on an ophthalmic list;
(ii) an individual who is providing special ophthalmic services in accordance with section 28C arrangements or section 17C arrangements;'.
Amendment No. 84, in page 14, line 27, at end insert—
'"ophthalmic list" has the same meaning as in section 4A(3) of the National Health Service and Community Care Act 1990 or section 17AA(3) of the 1978 Act;'.
Amendment No. 85, in page 15, line 10, after 'services', insert'; and
special ophthalmic services" means sight testing and related services provided to persons over the age of 60; and "sight testing" has the same meaning as in section 36(2) of the Opticians Act 1989'.
Amendment No. 86, in page 15, line 19, after 'Board)', insert or
(c) special ophthalmic services are provided (otherwise than by the Board)'.
Amendment No. 87, in page 15, line 22, after 'services', insert 'or special ophthalmic services'.


Amendment No. 88, in page 16, line 18, at end insert
'; and
"special ophthalmic services" means sight testing and related services provided to persons over the age of 60; and "sight testing" has the same meaning as in section 36(2) of the Opticians Act 1989'.
Amendment No. 89, in page 16, line 33, at end insert—

(ca) in the case of an agreement under which special ophthalmic services are provided—
(i) a person on an ophthalmic list;
(ii) an individual who is providing special ophthalmic services in accordance with section 28C arrangements or section 17C arrangements;'.
Amendment No. 90, in page 17, line 18, at end insert—
'ophthalmic list" has the same meaning as in section 4A(3) of the National Health Service and Community Care Act 1990 or section 17AA(3) of the 1978 Act;'.
Amendment No. 91, in page 17, line 49, after 'services', insert '; and
special ophthalmic services" means sight testing and related services to persons over the age of 60; and "sight testing" has the same meaning as in section 36(2) of the Opticians Act 1989'.
Amendment No. 92, in clause 22, page 18, line 16, after 'services,', insert 'special ophthalmic services,'.
Amendment No. 93, in page 20, line 18, after 'services,', insert 'special ophthalmic services,'.

Mr. Malone: I shall first deal briefly with new clause 1, on which there is consensus in the House. In Committee, I noted that we were in broad sympathy with a new clause tabled by the hon. Member for Dulwich (Ms Jowell) aimed at regularising the practice that optometrists follow when they find that a patient has an injury or disease of the eye. I am pleased that I think that I can honour my undertaking to the Committee.
New clause 1 replaces section 31 of the Opticians Act 1989 and would enable the General Optical Council to submit a new rule on referrals for consideration by the Privy Council. It would cover all optometrists in whatever context they worked, and give the General Optical Council virtually full discretion in prescribing, through the new rules, when an optometrist should refer a patient with a disease or injury of the eye to a registered medical practitioner. The only constraints would be that it would have to provide exemptions for emergencies or for a patient referred to the optometrist for orthoptic treatment—that is, a patient already under the care of a registered medical practitioner.
The doctors are most affected by the changes are general practitioners and ophthalmologists. Their representatives on the General Optical Council are ready to contribute to the drafting of a new rule. We would also take the views of the medical profession into account in any advice that we gave to the Privy Council on a new rule.
The amendments of the hon. Member for Southwark and Bermondsey (Mr. Hughes) are all linked to the objective of providing free NHS sight tests to everyone aged over 60, so I shall take them together. We did not exclude ophthalmic services from the pilot schemes because we judged that optometrists were different or inferior to doctors and dentists, but because powers already exist for us to conduct trials of nearly all the permutations by which a health authority might wish to

provide ophthalmic services. There are no restrictions on admission to the ophthalmic lists kept by health authorities, and by health boards in Scotland, except that applicants should be appropriately qualified.
There are many examples, as hon. Members know, of shared eye schemes whereby optometrists contribute to monitoring the eye health of patients with sight-threatening diseases such as diabetes and glaucoma. We intend to give powers to health authorities to regularise such arrangements through the NHS contract provisions in clause 30. Many of the hon. Gentleman's objectives are already met by the Bill.

Mr. Simon Hughes: The Minister is right to say that the amendments are linked. Ophthalmic services are not given parity with personal medical and dental services in clause 1. The rest of the drafting of the amendments replicates that of the Bill. Parity of treatment is the purpose of the amendments, and I do not think that that is covered by the current arrangements.

Mr. Malone: That does not need to be enshrined in primary legislation, because there is already a power to bring it about. If the hon. Gentleman wants an undertaking that we view the role of optometrists as important and ophthalmic services as essential to the provision of a range of primary care services, I am happy to give such an assurance. We intend to give powers to health authorities to regularise existing arrangements such as shared eye schemes through the provisions on NHS contracts in clause 30. The matter is not explicitly covered in the Bill because we do not need to write in such a power.
I give the hon. Gentleman the assurance that I suspect he seeks—that we view the matter as being of great importance. We want to regularise the excellent schemes that are already growing up in the service, such as shared eye schemes. I think that I mentioned that to the hon. Gentleman in Committee.
I do not believe that giving health authorities and health boards powers to extend the criteria for eligibility for free NHS sight tests would be an appropriate use of development funds. We believe that people who can afford it should pay for their sight tests. I have often put that argument to the House. I am glad that it seems to be catching somewhat, at least with Labour Front-Bench spokesmen, if not with the hon. Member for Southwark and Bermondsey.
Any help that is available, especially from development funds, should be concentrated on vulnerable members of the community. When dealing with problems such as this, targeting is important. About 40 per cent. of the population are eligible for NHS sight tests, including people on low incomes and those at special risk of eye disease. The policies are framed precisely to target available resources on those at greater risk.
We estimate that removing all restrictions on eligibility for NHS sight tests would cost about £140 million a year, while making everyone over 60 eligible would cost £32 million a year. As so often with health care, we are talking about proper targeting to bring about the best possible results. That £32 million could pay for about 4,000 cataract operations. Cataract surgery is one of the most effective eye care interventions and leads to


improved visual acuity for more than 80 per cent. of patients treated. That such targeting is effective is shown by the fact that between 1984 and 1995 the number of eye lens operations, which are mainly for cataracts, increased by 174 per cent.
As I said, we are no longer alone in our judgment of priorities. The hon. Member for Islington, South and Finsbury (Mr. Smith) was quoted in last week's press as saying that the Opposition had no commitment to restoring universal free sight tests. In that light, I have every confidence that they will join me in rejecting the amendments. I commend new clause 1 to the House.

Mr. Simon Hughes: I am grateful for the opportunity to speak on this group of amendments. I do not take exception to new clause 1, but I would like to speak on the amendments grouped with it. The Minister's evaluation of my reason for tabling new clause 9 and our other new clauses and amendments was right. It is to ensure that we can go back to having, under the NHS, both piloted ophthalmic services and the ability to return to free dental and eye checks.
I understand the debate about targeting and generalising. There is an honest intellectual debate about that—I do not pretend otherwise—and I doubt whether I can persuade the Minister. If I am wrong, I would achieve a significant but slightly unexpected change of Government policy. However, I want to give the serious argument on the other side of the debate to that which the Government espouse and to cite the helpful evidence from answers from the Minister's Department supporting it.
The change in policy in relation to eye and dental checks was controversial. If we could include, as new clause 9 does, pilot schemes under which special ophthalmic services are provided and also, as clarified by amendment No. 79, pilot schemes for sight testing for the over-60s, we would achieve good primary health care. That is what the debate is about.
I would like to go further than the amendments. I do not want someone to say later, "You only included sight testing for the over-60s—what about the rest?" Our policy is to do everyone. However, for the purposes of conciliation and compromise with other parties, I am only putting forward, in amendments Nos. 77 and 79, sight testing for the over-60s. I want to speak specifically about amendment No. 79.
The Department, in timely fashion, gave me yesterday a parliamentary answer with figures for the increase in cataract problems. The crude figure shows that there has been a 57 per cent. rise in treatment for cataracts and a 44 per cent. rise in treatment for glaucoma in the past four years. The figures, which come from the Department of Health, are not disputed.
I shall not speak at length on the figures, which are available in Hansard. However, they are—at least—worrying and, I would say, frightening. Some 58,289 more people received cataract treatment in 1995 than in 1991, and 7,651 more people received treatment for glaucoma. Figures from the Library show that an average cataract removal operation costs £1,800, which means that the total bill to the NHS for cataracts alone is £105 million—a significant sum. Just so that people do not accuse me of being nationalistic or partisan, the Welsh figures for cataract treatment are up by 64 per cent. and the Scottish figures are up by 48 per cent.
There is broad support for the case made to Ministers by the Royal National Institute for the Blind, whose representatives came to me and said that they were off to meet the Secretary of State for Health immediately afterwards. The RNIB produced a report some weeks ago and, in support of that report, there are 100 signatures on an early-day motion on the matter—eight Conservative Members, 71 Labour Members and the remainder from my party. The early-day motion argues for a return to free eye tests for this limited category.
The Minister said that we must target the most vulnerable, and in this context no one will be surprised to learn that those most vulnerable are the elderly. Therefore, this proposal is targeted at reintroducing free eye tests for the over-60s. The Minister has given figures from parliamentary answers which suggest that reinstating free eye tests for everybody would cost £100 million, but that reinstating free eye tests for the over-60s would cost only £32 million.
I believe that there would be huge public support for a return to free dental and eye checks, and the Government and the Labour party are making a mistake in not supporting this. I am disappointed, to say the least, that the Labour party—as confirmed a couple of weeks ago—is not supporting the proposal. If it cannot find £32 million to restore free eye tests for the over-60s, its welfare policies must be even thinner than people imagine.
Early diagnosis is essential in preventing the eventual development of serious eye conditions, and the evidence from the RNIB is clear. I was privileged to open the new lecture theatre at the Institute for Optometry at the Elephant and Castle in my constituency. That profession wants to be able to do additional work, and there are huge amounts of work for qualified optometrists. We need more of them, and this debate should be a plea for more people to come forward to qualify to work in this part of the health and medical services.
I shall not detain the House much longer. The figures make the case and, historically, Members from all parties have made the case. We could do some practical work by passing new clause 10. If the new clause were to be passed, I imagine that the Minister would concede that the other amendments could go through on the nod. We should reinstate as a primary care pilot scheme the ability to give free eye tests to the over-60s. I ask the House to support the new clause enthusiastically.

Ms Tessa Jowell: We welcome the Minister's support for new clause 1, and we congratulate him on fulfilling his commitment in Committee by moving the clause today. The new clause is welcomed by the Association of Optometrists, and it allows proper professional discretion for optometrists. It is consistent with the spirit of innovation that we supported throughout the Committee. We would argue that those who look most at eyes, and at eyes most of the time, are competent to make judgments about whether patients need a referral for further medical advice.
I shall refer briefly to the amendments tabled by the hon. Member for Southwark and Bermondsey (Mr. Hughes) and his hon. Friends. We do not think that this is the place to raise these issues again. When the Government imposed charges for eye tests, we opposed them and fought hard against the abolition of free tests. But we are sick and tired


of the hon. Gentleman, his hon. Friends and candidates from his party going on public platforms up and down the country making promises that they know they have not the slightest likelihood of ever having to take responsibility for implementing. It is rank hypocrisy, and I shall be perfectly prepared to give way to the hon. Gentleman after I have asked him to confirm whether he joined the Opposition in the last Parliament when this matter was put to the vote.

Mr. Simon Hughes: I can deal with both matters. We are committed to the Budget figure, and to finding the money. On the question of the votes on this issue, I have been here for all such votes, except one, in the past 14 years.

Ms Jowell: I see. When we had a chance in the last Parliament to defeat the Government on the imposition of charges for eye tests, the hon. Gentleman was absent. That makes my case and suggests how his amendments should be dealt with. We are glad to support new clause 1.

Mr. Malone: The hon. Lady had better tread with care, as I understand that the hon. Member for Southwark and Bermondsey has said in print that in the event of a hung Parliament—which I think is unlikely, in view of our impending victory—he intends to be Minister for Health in a coalition Government. She had better have a care when insulting someone who may be a future colleague.

Ms Jowell: There are two words which deal with that ambition: "Dream on".

Mr. Ieuan Wyn Jones: I rise to support the amendments tabled by the hon. Member for Southwark and Bermondsey and his colleagues, as it is important to stress that other parties would like to see the reintroduction of free eye tests generally and, in the context of this debate, for the over-60s. I have not had the benefit of listening to all the debates in Committee, but I have read some of the Minister's comments. One of the issues highlighted is whether the Government have properly assessed the risk of sight loss involved.
The Minister said in Committee on 27 February:
we believe that it is important to develop policies to ensure, where possible, that resources are targeted to where they are needed—to those sections of the population especially at risk.
However, the RNIB report "Losing Sight of Blindness" clearly shows that despite age being the most significant risk factor in terms of developing eye conditions, older people are not eligible for free eye tests on the ground of age alone. Those at the highest risk ought to be those who get free eye tests.
The Minister went on:
It is important to meet any proven possibility of providing better care. When we are talking about a limited resource, it is better to look at the principle of targeting care than to re-establish something general that is less easy to prove has a definable result."—[Official Report, Standing Committee D, 27 February 1997; c. 198–99.]
Again, the RNIB makes it clear that people aged 60 and over are the group most at risk of developing eye disease because of their age. It is consequently believed that there is a proven need to target that group as the most high-risk group.
We all agree that not only is early diagnosis and treatment vital to prevent avoidable sight loss, but it is cheaper when compared with the full health and social care costs for an individual with advanced eye disease. Poor vision and blindness lead to greater reliance on social services, limited mobility and expensive medical interventions. Sight disability imposes additional expenses on the individual that are not adequately compensated for in the benefits system. Poor eyesight is a significant contributory factor to accidents among older people. Although there is an estimated cash saving of £32 million from not providing free eye tests for people aged 60 and over, that will be more than offset by those other costs, especially the costs of looking after elderly people who have lost their sight or whose sight is deteriorating.
6.30 pm
It is important to note that there is a clear and genuine dispute about the Government's figures on the number of people going for eye tests. Research carried out in 1994–95 showed that the number of people going for eye tests was 12.7 million, but the Government's change in the methodology resulted in the figures for that year being 14.6 million—clearly the Government wanted to show an increase. While there is considerable dispute about the figures, there is clearly a disincentive for the elderly in particular to go for tests when they have to pay for them.
It is vital that the quality of the eye tests is ensured. By law, an eye test must include a comprehensive eye examination to check for any disease, injury or abnormality that may be present. I am sure that the Government will want to ensure that the those tests are carried out to the proper standard. In addition, there is widespread misunderstanding about who qualifies for exemption under the current rules. Many people are not aware of the exemptions, which should be more widely promoted.
We know that older people have a far higher level of eye disease than other age groups: 90 per cent. of blind and partially sighted people are aged 60 and over. At just over 1 million people in the United Kingdom, that is a significant number. Given the high incidence of visual impairment among the over-60s, it is of great concern that that high-risk group is not exempt from charges on the ground of age alone. In 1995–96, it was estimated that almost 4.5 million eye tests were carried out on people aged 60 and over, of which only 43 per cent. were done on the national health service; therefore, 57 per cent. paid for the tests. It is clear that the single most significant factor in developing eye disease is age. There is a proven, clear and discrete need and I want the Government to recognise that in the context of the debate on free eye tests.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 8

EMPLOYMENT OF PRE-REGISTRATION HOUSE OFFICERS IN MEDICAL PRACTICES

'.—(1) The Medical Act 1983 is amended as follows.

(2) In subsection (2) of section 10 (experience required for full registration as a medical practitioner), for "approved hospitals or approved institutions," substitute "—

(a)approved hospitals,
(b)approved institutions, or


(c) approved medical practices,".

(3) In subsection (3) of section 11 (construction of section 10, etc), after the first "where" insert "—
(3)in the case of an approved hospital or an approved institution,",

and at the end insert "; or
(b)in the case of an approved medical practice, the person employed satisfies such conditions as to residence as may be prescribed".
(4) In subsection (4) of section 11—
(a) insert in the appropriate place—
"medical practice" means a prescribed description of practice in which one or more medical practitioners—
(i)provide general medical services under Part II of the National Health Service Act 1977, Part II of the National Health Service (Scotland) Act 1978 or Part VI of the Health and Personal Social Services (Northern Ireland) Order 1972; or
(ii)perform personal medical services in accordance with arrangements made under section 28C of the 1977 Act, section 17C of the 1978 Act or the corresponding provisions of the law in force in Northern Ireland;";
(b) in the definition of "prescribed", after "means" insert "—
(a)in subsection (3)(b) and in the definition of "medical practice", prescribed by regulations made by the Secretary of State; and
(b)in the other provisions of this Part,".
(5) After subsection (4) of section 11 insert—

"(4A) The Education Committee may by regulations provide that the period of employment in a medical practice which may be reckoned towards the completion of any of the periods mentioned in section 10(3)(a) above shall not exceed such period as may be specified in the regulations.
(6) In subsection (5) of section 11, after "under subsection (2) of section 10 above" insert "or under subsection (4A) of this section".
(7) After subsection (6) of section 11 insert—
"(7) Regulations made by the Secretary of State under this section must be made by statutory instrument; and such a statutory instrument shall be subject to annulment in pursuance of a resolution of either House of Parliament." '.—[Mr. Malone.]

Brought up, and read the First time.

Mr. Malone: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Dame Janet Fookes): >: With this, it will be convenient to discuss the following: amendment (a) to the proposed clause, in line 40, at end add—
'(8) Section 12 is omitted.'.
Government amendments Nos. 59, 60, 62, 63, 65, 67 to 72, 74 and 75.

Mr. Malone: During the Second Reading debate I gave an undertaking to meet the concerns of several hon. Members about the limitations in the Medical Act 1983 that prevented pre-registration house officers from taking placements in general practice except in health centres. In Committee, I explained that that was clearly an anomaly that we were happy to address. I am therefore pleased to move new clause 8 and to discuss amendment No. 75, which deliver on my undertaking to the Committee. With those, I want also to speak to the related amendments to clauses 11 and 22 and schedule 2.
New clause 8 and amendment No. 75 are designed to enable more young doctors in their final year of basic training—the pre-registration house officer year—to undertake part of that training in general practices. The case for the change has been made for many years and it is now quite timely, given that the Bill provides opportunities for more flexible ways of working and providing services. Much of a primary care-led national health service has to do with the training provided in the context of primary care.
It is important that I should set out a number of practical issues that will have to be carefully considered before those placements in general practice are fully introduced. I want there to be no misunderstanding among hon. Members: the measure before the House is an enabling measure and there is considerably more work to be done. We are considering encouraging carefully evaluated pilot schemes in health centres, which will enable us to assess whether any constraints should be placed on the activities of pre-registration house officers in general practice. For example, concerns were raised in Committee about the prescribing of medicines and unaccompanied visits to very young children or, indeed, to any patient.
Those are important issues and we must balance young doctors' training needs with the protection of patients' interests and safety. The education committee of the General Medical Council will need some time for the careful development of regulations and guidance to cover those issues and will need to consult widely. Regulations made by the education committee will be approved in the normal way by the Privy Council. We therefore do not expect the new arrangements in general practices to be in place for some time.
I now turn to amendment (a) to new clause 8. There must have been some misunderstanding that has led to the amendment being tabled, because it removes entirely section 12 of the Medical Act which provides that a health centre cannot be an approved institution for the purpose of pre-registration house officer training, unless it is an NHS centre provided under the National Health Service Act 1977 or the Scotland or Northern Ireland equivalents. Where it is so and if other conditions are satisfied, PRHO training can take place in health centres. In other words, if that part of the Medical Act were removed, it would cast doubt on whether PRHO placements—including some that are now in operation—could take place in health centres. I am sure that that was not what was intended.
I turn finally to the amendments to clauses 11 and 22 and schedule 2. In brief, those replicate provisions that currently exist in general medical services and give the Secretary of State powers to replicate those that operate in the general dental services. They will enable us to ensure that training can take place in the different environments and service settings for which the Bill provides. I assure hon. Members that all the controls that currently underpin training within general medical and dental services will equally be applied to personal medical and dental services, so that training activities can be undertaken with no effect on the quality of the services provided. I commend the amendments to the House.

Ms Jowell: The new clause has been introduced with cross-party support and is also, as the Minister made clear, supported by the General Medical Council, which is


responsible for overseeing the pre-registration year for medical graduates. As part of that pre-registration year, medical graduates can spend up to four months in general practice.
The need for the new clause is created by section 12 of the Medical Act 1983, which restricts the experience of general practice that may be counted towards the 12 months of general clinical training needed for full registration to that obtained in practices based in publicly owned premises. However, general practitioners are increasingly practising in buildings that are not publicly owned and that fact prevents medical schools from incorporating a training period in the pre-registration year.
Currently, of 3,800 new doctor graduates each year, only three spend part of their pre-registration time in general practice. The new clause, therefore, would amend the 1983 Act to broaden the scope for employment of pre-registration house officers to an approved hospital or approved institution.
Opposition Members believe that to be a practical way of starting to tackle the crippling shortages of GPs in many of our inner cities and of coping with the long-term recruitment crisis confronting general practice. We believe that, if medical students in training have more exposure to general practice and more opportunity to train in general practice, general practice and the opportunities offered by general practice as part of primary care will become more appealing. We cannot envisage the proper and well-grounded development of the health service with the shift from secondary to primary care without the ability to tackle the acute shortage of general practitioners.
We regard the measure as a way of improving standards in the long run and ensuring a better gender balance in the availability of general practitioners, which was mentioned by my hon. Friend the Member for Cannock and Burntwood (Dr. Wright) on Second Reading.

Mr. Simon Hughes: As I said on Second Reading, this measure is welcome. There was lobbying from both sides of the House, and the Minister undertook to consider the matter. I am grateful for that. This welcome measure will allow further development of general practitioner opportunities. I am grateful to colleagues—one of whom I believe is about to seek to catch your eye, Madam Deputy Speaker—for the fact that they, on behalf of the General Medical Council, have ensured that we are aware of the strong view held by the General Medical Council on this subject.

Mr. Gareth Wardell (Gower): I have great pleasure in welcoming what the Minister has said, and I am delighted to discover that this anomaly in the Medical Act 1983 will now be put right. Madam Deputy Speaker, as a lay member of the General Medical Council, I was pleased to catch your eye on Second Reading, and I was pleased that the hon. Member for Chislehurst (Sir R. Sims), who also sits as a lay member of the General Medical Council, made a valuable contribution to that debate.
Although I shall not press the new clause to a vote, I have one concern: I do not quite follow the logic of the new clause that the Government have tabled, because it does not seek to remove section 12 from the 1983 Act. Although the amendment contains three lines referring to

an order or regulation to be made by the Secretary of State to accomplish the objective that is sought, I do not understand why section 12 of the 1983 Act will remain on the statute book, given that it appears to be in conflict with the section that is sought to be amended.

Mr. Malone: It might be helpful if I spell it out for the hon. Gentleman. Such regulations will not be in place for some time and several people are already undertaking training in such health centres. If we simply removed that section of the legislation, their future placements, some of which start in August 1997, might be in doubt. Section 12 remains merely to ensure certitude.
The GMC was seeking to enable future training arrangements to take place in a wider context, and that is what the new clause enables them to do. It would be ironic if, while opening up the prospects for training in primary care in general, allowing scope for substantial discussion about how that is introduced, we were to agree a provision that prevented the training that is already taking place under what, once the Bill is through the House, we could probably safely describe as "the old arrangements."

Mr. Wardell: I am grateful to the Minister for that explanation. I now understand his rationale for seeking to proceed in this way; otherwise it would be a great disservice to the, albeit few, people who are currently in training.
Once again, I thank the Minister for the fact that he listened carefully to this point on Second Reading. I am very grateful to him, to Labour Front Bench Members and to the hon. Member for Southwark and Bermondsey (Mr. Hughes) for the fact that we have been able, on this occasion, through an all-party system, to agree on something that will benefit the national health service so much.

Question put and agreed to.

Clause read a Second time.

Madam Deputy Speaker: Amendment (a) not to be moved?

Mr. Wardell: No, not to be moved.

Clause added to the Bill.

New clause 2

PROVISION OF PERSONAL MEDICAL OR PERSONAL OR DENTAL SERVICES UNDER A PILOT SCHEME (DISQUALIFIED BODIES)

'.—(1) Notwithstanding anything in sections 2 or 3 above, an agreement which constitutes, or is one of the agreements which together constitute, a pilot scheme may not be made by an authority with a disqualified body.
(2) For the purposes of this section, a body is a disqualified body if—
(a) it is a public limited company; or
(b) it is a person or body which provides medical or dental services other than within the National Health Service and does not fall within paragraphs (a) to (c) and (e) of section 2(2) or 3(2) above; or
(c) it enters into arrangements involving any special obligation or limit on clinical independence or choice, whether by virtue of a purchase, lease, discount or inducement, with any body concerned with the provision of medical, nursing or pharmaceutical services, or with


the provision of medicines or medical or related appliances, other than a person falling within paragraphs (a) to (c) and (e) of section 2(2) or 3(2) above.
(3) For the purposes of determining whether a body is a disqualified body, it shall be sufficient proof that a body is not disqualified if the Secretary of State has issued a certificate that a body is not a disqualified body for the purposes of a pilot scheme specified in that certificate.
(4) A certificate issued under subsection (3) may be withdrawn or cancelled by the Secretary of State, and he shall inform the relevant authority of any such a withdrawal or cancellation.'.—[Ms Jowell.]

Brought up, and read the First time.

Ms Jowell: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this, it will be convenient to discuss the following: New clause 3—Provision of personal medical or dental services (disqualified bodies)—

'.—(1) In the 1977 Act, after section 28D (as inserted by section 21(1) above) insert—

Persons with whom agreements may not be made

28DD.—(1) Notwithstanding anything in sections 28C or 28D above, an agreement which constitutes, or is one of the agreements which together constitute, a pilot scheme, may not be made by an Authority with a disqualified body.

(2) For the purposes of this section, a body is a disqualified body if—

(a) it is a public limited company, or
(b) it is a person or body which provides medical or dental services other than within the National Health Service and does not fall within paragraphs (a) to (d) of section 28D(1) above; or
(c) it enters into arrangements involving any special obligation or limit on clinical independence or choice, whether by virtue of a purchase, lease, discount or inducement, with any body concerned with the provision of medical, nursing or pharmaceutical services, or with the provision of medicines or medical or related appliances, other than a person falling within paragraphs (a) to (d) of section 28D(1) above.
(3) For the purposes of determining whether a body is a disqualified body, it shall be sufficient proof that a body is not disqualified if the Secretary of State has issued a certificate that a body is not a disqualified body for the purposes of the agreement specified in that certificate.
(4) A certificate issued under subsection (3) may be withdrawn or cancelled by the Secretary of State, and he shall inform the relevant Authority of any such withdrawal or cancellation."
(2) In the 1978 Act, after section 17D (as inserted by section 21(2) above) insert—

"Persons with whom agreements may not be made."

17DD.—(1) Notwithstanding anything in sections 17C or 17D above, an agreement which constitutes, or is one of the agreements which together constitute, a pilot scheme may not be made by a Board with a disqualified body.

(2) For the purposes of this section, a body is a disqualified body if—

(a) it is a public limited company, or
(b) it is a person or body which provides medical or dental services other than within the National Health Service and does not fall within paragraphs (a) to (d) of section 17D(1) above; or

(c) it enters into arrangements involving any special obligation or limit on clinical independence or choice, whether by virtue of a purchase, lease, discount or inducement, with any body concerned with the provisions of medical, nursing or pharmaceutical services, or with the provision of medicines or medical or related appliances, other than a person falling within paragraphs (a) to (d) of section 17D(1) above.
(3) for the purposes of determining whether a body is a disqualified body, it shall be sufficient proof that a body is not disqualified if the Secretary of State has issued a certificate that a body is not a disqualified body for the purposes of the agreement specified in that certificate.
(4) A certificate issued under subsection (3) may be withdrawn or cancelled by the Secretary of State, and he shall inform the relevant Board of any such withdrawal or cancellation.".'.

Government amendment No. 11.

Amendment No. 57, in clause 8, page 6, line 28, at end insert—

'(5) If the Secretary of State is satisfied that a party to an agreement which constitutes, or is one of the agreements with together constitute, a pilot scheme is, or has become, a disqualified body (within the meaning of section (Provision of personal medical or personal dental services under a pilot scheme (disqualified bodies)), he must give directions to the authority concerned requiring them to bring the scheme to an end within twelve months in accordance with the directions.'.

Ms Jowell: The purpose of new clauses 2 and 3 is to close the door completely on the possibility of commercial involvements in pilot, schemes and we believe that they go substantially beyond the Government's amendments in providing safeguards against that.
The threat of the privatisation of primary care created by the Bill's provisions has been at the heart of our dispute with the Government over the Bill since its introduction. We remain convinced that this is what the Government actually want and what they actually intended, and we believe that it must be made impossible with all the drafting skill available.
Let me remind the House of the history of the climb-down that led the Government to table new clauses in Committee and to table further new clauses tonight, on Report.
The British Medical Association was strongly opposed to the Government's plans to allow what they describe as a third party in the doctor's consulting room. The BMA had no doubts that the Bill represented the commercialisation of the family doctor service, and it said in its press release of 24 January 1997:
It will undoubtedly make the privatisation of services that much easier. GPs must remain the patient's advocate, and any move that threatens to curtail GPs' freedom in the surgery is bad for patients.
The campaign against privatisation as created by the Bill has been led by the Labour party and the British Medical Association. However, only after the BMA threatened a hostile campaign in the run-up to the general election did the Government's resolve start to crack. After meetings with the BMA, they agreed to limit the employment of GPs to what they called the "NHS family".
Despite Government promises to ensure that the Bill does not pave the way for commercialisation of general practice, a range of companies insist that the Bill, as amended, does not alter their plans to become involved in


NHS primary care. All who want to follow events will no doubt eagerly read the current edition of Pulse, which has provided excellent coverage of this saga.
Let me give you, Madam Deputy Speaker, for example, the words of Sinclair Montrose Healthcare, the owner of a private GP clinic at London's Victoria station, which intends to make several pilot proposals for salaried GPs to work alongside privately employed GPs in its clinics.
We can still run NHS services from our centres.
UniChem, which has also expressed interest in submitting a bid for a pilot, believes that the Bill, as amended, does not rule it out of the NHS as a primary care service provider. The company said:
The door was reasonably wide open but it is now only open a couple of inches. We are waiting to see what the totality of the Bill is before we start drawing up a strategy.
Boots says that its plans to strike up a partnership arrangement with groups of GPs are not affected. BUPA is still "very interested" in developing its involvement in primary care, and the company said:
We hope the door is not shut.
PPP Healthcare is the only company to have drafted a pilot proposal. Its plan to locate GP services at its private London hospitals—with all secondary referrals to the PPP hospital—is still "on the table".
That is why we have tabled new clauses that would keep the door to privatisation not two inches open but completely shut. Since the climbdown on commercialisation, the Secretary of State has tried to claim that concerns about commercialisation were misplaced. He is entirely disingenuous, but a series of statements by Ministers shows that privatisation was absolutely on the Government's agenda. It is also clear evidence that, if the Government were re-elected for a fifth term, they would push ahead with the full-scale privatisation of primary care. During the debate on the White Paper, in refusing to rule out companies employing GPs, the Secretary of State said:
I am interested in a proper reward for those who deliver an efficient, high-quality service for the patient. Provided that I am satisfied that those tests are passed, I am willing to consider proposals made with the support of the professional staff concerned."—[Official Report, 15 October 1996; Vol. 282, c. 595.]
In an interview with Pulse magazine, he went on to confirm that the Government intended to open up NHS primary care to the primary sector. He said:
If it is a difficult area and if a service cannot be provided using other routes, commercial enterprise may offer a solution. The main issue is whether it is an easily recognisable NHS service and it is better than the previous one provided.
That is what Ministers said about the private finance initiative.
The noble Baroness Cumberlege stated specifically in Committee in another place that companies would be able to bring forward proposals for pilot schemes. She said:
We are serious about tackling these difficulties and do not want to rule out any sensible opportunities, including a GP being employed by a commercial organisation ‣ schemes put forward by commercial organisations will have to be endorsed by health authorities and then approved by the Secretary of State."— [Official Report, House of Lords, 17 December 1996; Vol. 576, c. 1403–4.]

It is absolutely clear that in the world outside this place there is a very clear and established view that privatisation of primary care is still possible, despite the Government amendments to the Bill. Kingsley Manning of Newchurch Consultancy was reported in Pulse as saying:
I don't think it will remove the private sector. All it will do is to make the arrangements more complicated and more difficult".
We ask the House to support our new clauses this evening to make privatisation of primary care in the national health service not more difficult and more complicated, but absolutely impossible.

Mr. Simon Hughes: My colleagues and I expressed concern about this matter on Second Reading. We acknowledged then that the Secretary of State had confirmed to the House that he intended to close the loophole, so we did not support the reasoned amendment tabled by the Labour party at that time.
I understand that the Government have some reservations about the new clauses. I am unhappy that they think that it is not worth trying to bolt down as tightly as possible the chance of private sector intervention. I am troubled also by the fact that, as far as I know, the Government have not yet given an undertaking to establish a register of general practitioners' interests and a register of the interests of all those in the health service, which, like the Register of Members' Interests, would be publicly available. We would then know absolutely whether any GP was acting as a front for someone else—such as the companies to which hon. Member for Dulwich (Ms Jowell) referred a moment ago—who was funding an operation for private commercial profit.
If we are limiting those who can approach the "NHS family" to conduct pilot schemes—as my colleagues and I believe absolutely and firmly that we should—it seems to me that the Government should accept the elaboration of that point in new clause 2.
The British Medical Association is much happier with the position as it now stands in light of amendment No. 11, which the Government undertook to bring forward. However, it remains concerned about one matter. It is worried that, under the new arrangements, there might be some risk to the partnerships that have been created already by GPs, especially for out-of-hours work.
When the Minister responds to new clause 2—which my colleagues and I will support—I ask him to address specifically how the changes in the Bill will impact on current arrangements, and particularly upon those who are working in commissioning or in other forms of partnerships for weekend, evening and night work. The BMA's concern should be addressed, and I would be grateful if the Minister could deal with it.

Mr. Ben Chapman: I am grateful, Madam Deputy Speaker, for this very early opportunity to address the House. I would like to begin by paying tribute to my predecessor, Barry Porter, whose sad and untimely death led to the Wirral, South by-election. He was a native Wirralian, and a popular and hard-working constituency Member of Parliament. As the Member for Bebington and Ellesmere Port and then for Wirral, South, he served the people of the Wirral for nearly 20 years. As I go around the constituency, I meet many of his friends and constituents who remember him with the greatest


warmth. He was obviously held in the highest regard, and—if I may put it in these terms, Madam Deputy Speaker—he will be a very hard act to follow.
I also take this opportunity to thank the right hon. Member for Wirral, West (Mr. Hunt), who so ably helped to handle constituency affairs while Wirral, South was without a Member of Parliament. Similar thanks are due to my hon. Friends the Members for Wallasey (Ms Eagle) and for Birkenhead (Mr. Field) for all their efforts during that period. Wirral Members of Parliament have traditionally worked together as a team when called upon to do so in order to serve the interests of the Wirral as a whole. That was evidenced this morning in the Adjournment debate, and it is evidenced by the presence of Wirral Members tonight. I intend to join that team, and to play a full part in it. Thanks are also due to my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) for the considerable support that he has given me.
I am as proud as I am sure Barry Porter was to serve the people of Wirral, South. That is where I chose to live when I returned to the north-west of England following my time in the embassy in China because of the warm welcome that I received there. It is now my home. Because of its population mix, it is, in many respects, a microcosm of Britain. My constituency stretches from the romantic wilderness of the Dee estuary, through the old village of Heswall, where I live, to a coastal plain and then to present-day Heswall and Gayton.
Travelling across the constituency from east to west, one traverses rolling countryside and farmland in Clatterbridge and Bebington, with villages such as Thornton Hough and Storeton. As one approaches the east of the constituency, one enters the pleasant residential areas of Bromborough, which has a thriving leisure, retail and industrial park, and Eastham. As one gets higher or closer, one begins to get a characteristic, impressive view of the Mersey. Again, in this part of the constituency as in the rural part, villages are a characteristic, but are now sometimes surrounded by urban development.
7 pm
Despite its residential nature, the constituency has a long industrial history, of manufacturing in particular. There is a long-standing theme of the relationship of industry to the welfare of the people that surround it in Wirral, South and more widely. Much of the constituency bears the mark and carries the legacy of the first Lord Leverhulme, notably the attractive industrial village of Port Sunlight.
That is appropriate, as, among the world-class firms in the industrial belt of the constituency, Unilever in its various forms is still the biggest employer. There are many other companies of world class, of which Candy and, in a smaller sense, McTay Marine, are but two. Vauxhall, not in the constituency but on the borders, is of course also a world-class company. All those firms provide wealth to the Wirral as a whole because of the residential spread of their employees.
It may be a statement of the obvious, but without such a competitive and successful wealth-creating sector, we cannot prosper as a nation and provide the quality of services that we would like, be it in relation to the education of our children, the care of the elderly, the provision of local services or health services, including

primary health care. That is why I want to say a few words about the industry of Wirral, South in a debate about health.
Labour is committed in government to a partnership between industry and Government at national level. Such a partnership is just as necessary at local level. We must understand our businesses and be in dialogue with them in order to avoid, for example, the situation in which Ford announced, apparently out of the blue, the moving of the production of the Escort from Halewood and the consequent potential job losses. The situation was alleviated only by the subsequent intervention of Labour Members of Parliament.
I intend to develop a dialogue with local industry and commerce, a role where I hope that my previous experience at the Department of Trade and Industry and as a commercial diplomat will bring extra added value.
Issues relating to the health service and to law and order dominated the Wirral, South campaign. People there have long ceased to trust the Government in health matters. They do not believe that the health service is safe in Tory hands. They are fed up with the sort of creeping privatisation that we have just heard about. They want a change.
The hospitals that serve my constituency, Clatterbridge and Arrow Park, have excellent staff, but are beset by the problems that beset hospitals throughout the health service—the problems of long waiting lists, long waits for appointments, regular crises in accident and emergency departments, poor staff morale, lack of finances, staff shortages and so on. Typically, someone seeking an orthopaedic appointment in my constituency could wait 156 weeks for the appointment, let alone the treatment. In Wirral one in four patients wait at least six months for treatment, and there are 6,000 people on waiting lists. On occasions, patients assessed for medical admission as emergencies cannot be allocated a bed, resulting in unacceptable trolley waits.
People are fed up to the back teeth with the bureaucracy of the internal market. Health services for people in Wirral, South are creaking under the weight of bureaucracy. Patients charter standards for waiting list admissions and cancelled operations are regularly breached. Since the Government introduced the internal market, the north-west has lost almost 4,500 nurses and gained more than 2,500 bureaucrats. An extra £284,000 a day is spent on bureaucracy—enough for almost 300 extra patients to be treated every day.
That is why the people of Wirral, South welcome new Labour's proposals for a reduction of 100,000 in hospital waiting lists by cutting red tape in the health service and switching funds to patient care. They welcome the prospect of putting pride back into the health service—a service that was created by a Labour Government.
Health, Mr. Deputy Speaker, was the most significant concern of the voters of Wirral, South, which is why I sought to catch your eye in the debate today. The constituency has shown that it is also concerned about law and order, particularly youth crime, job insecurity, unemployment and declining standards in education. I intend to focus on all those and other issues, such as the provision of facilities for our youth, as the Member for Wirral, South in this Parliament and the next. I intend to be a strong voice for Wirral, South on all those matters.
When I took my seat, the Prime Minister advised me not to unpack my bags. Well, the bags are unpacked, the suits are in the wardrobe and the socks are in the drawer. I intend to be around for some years, sustaining a Labour Government who are, after my election in Wirral, South, surely coming in a few weeks.

Mr. Frank Field: It is a tradition in the House that we welcome new Members, and I do that unreservedly and with considerable pleasure. I could not help reflecting as I heard my new hon. Friend the Member for Wirral, South (Mr. Chapman) make his contribution, that had I managed to make my maiden speech with such style and with resolve, my parliamentary career might have taken a different turn from the way in which it has developed.
I rise not only to congratulate my new hon. Friend—I hope that I will have many opportunities in the Parliament ahead to take pleasure in his contribution—but because it seemed appropriate today, as this was the last occasion on which I could put on the record the sense of loss and grief that I feel at the death of Barry Porter. He was my friend, and one of the many great pleasures of representing Birkenhead in the House was the fact that I was his Member. I did my very best to represent his interests.
If Barry were here now, he would be making some pretty tough comments from the Bench below the Gangway, saying that there was always a danger of my making a meal when no meal should be made, but I am grateful to have had this chance to record my sense of loss at the death of Barry Porter.

Mr. Malone: I immediately add my warm congratulations to the hon. Member for Wirral, South (Mr. Chapman) on making his maiden speech. Whatever has been said about how temporary or permanent his stay may be was said by the Prime Minister, so I do not intend to add to that.
I thank the hon. Gentleman for his words. I also thank the hon. Member for Birkenhead (Mr. Field) for what the House has come to recognise as a typically generous gesture—his remarks about the late Barry Porter. All Conservative Members who knew him well recognised that he was a first-class constituency Member of Parliament and a valued colleague. I am sure that all those who were close to Barry Porter will read what has been said in the debate and will be most grateful for the warm remarks.
I congratulate the hon. Member for Wirral, South on his comments about his constituency. Although he has only recently come to the House, he has clearly absorbed some of its traditions very quickly. He made a first-class maiden speech, on which I congratulate him.
I slightly envy the hon. Gentleman his task in making a maiden speech. When I was elected to the House in 1983, there was no opportunity to make a maiden speech on Report. I was persuaded by my Whips to make a speech on Second Reading of what I was told was an important and interesting piece of legislation called the Telecommunications Bill. After I had sat down, having made my speech, it was vouchsafed to me that the convention of the House, which had not until then been disclosed to me, was that having spoken on Second

Reading, one was expected to serve on the Committee. Many sleepless nights followed for me, so I congratulate the hon. Gentleman on being able to make his maiden speech on Report and Third Reading. I wish that I had been accorded such an opportunity.
During the Bill's passage, we have been through the argument about commercialisation many times. I must tell the hon. Member for Dulwich (Ms Jowell) that, in my opinion, that argument died during the Second Reading debate. The hon. Lady exhumed the corpse on several occasions in Committee, but her attempts to give it artificial respiration failed. Here we have yet another attempt to breathe life into an argument that has long been dead.
In our debates, my right hon. Friend the Secretary of State and I have said—frequently, in my case—that we regard primary care as a jewel in the NHS crown. We said from the outset—in all the debates on the introductory White Papers, as well as debates on the Bill—that the whole purpose of the Bill is to enable primary care to be delivered to an even higher standard, across the country, as part of the national health service. From the start, we have taken very seriously any suggestion that the Bill might undermine the key characteristics of our primary care system. We listened to the arguments put to us by, among others, the health care professions and the British Medical Association, and we tabled a series of important amendments—including amendment No. 11—to ensure that we met those arguments.
I think that I can safely say something to the House—if not to the hon. Member for Dulwich, who I know will not accept any undertakings that I may give: she sees plots where there is none and future agendas where there is none. As I think I pointed out to her in Committee, when the argument is finally lost, she is obliged to invent a hidden agenda. Let me repeat, however, that our amendments have dealt thoroughly with the argument.
The amendments attempt to tighten further the rules governing bodies that may provide piloted services and services in permanent arrangements; but, with the exception—for historic reasons of which the hon. Lady will be well aware—of the handful of dental corporate bodies, public limited companies are already explicitly excluded from providing such services by clauses 2, 3 and 21 of the Bill. Those provisions make it crystal clear that the only companies that qualify as members of the NHS family—with the exception of dental corporate bodies—must have all their shares owned by individuals who are members of that NHS family.
In Committee, it was made clear that that was a watertight provision. I cannot see how it could possibly allow public limited companies to provide personal medical services, for example, and I therefore consider the new clause unnecessary. If the hon. Lady is taking her text merely from what she reads in Pulse, she should refer more to the Official Report of the Committee stage, in which she will find more accurate descriptions of the effect of the Bill.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) mentioned qualifying bodies. We drafted our new clauses carefully, to ensure that all who are properly members of the NHS family could provide services under the Bill. The hon. Gentleman spoke of what might happen with GPs, whether they worked


singly, in partnerships or—this was his specific point—as members of a co-operative. He particularly mentioned out-of-hours arrangements. The principle that would apply to such arrangements is no different from the system that would govern any other arrangements.
In drafting the Bill, we have always taken steps to ensure that any grouping involving anyone who is not a member of the NHS family is explicitly ruled out. If an organisation that was currently providing out-of-hours services did not qualify, it would not be able to bid for a pilot or enter into a permanent arrangement, unless it changed its structure to meet the terms of the Bill, and got rid of any of the elements that disqualified it in the legislation as we have amended it.

Mr. Simon Hughes: What the Minister has said is helpful. I am not trying to trap him into giving an answer that he does not want to give, but may I take it that, according to the advice that he has been given and his understanding, the Bill in its current form protects all existing arrangements involving whatever work NHS general practitioners do? May I take it that none of those GPs will be prejudiced?

Mr. Malone: The Bill will not prejudice GPs who provide the services that they currently provide with the arrangements that they choose. If they are providing out-of-hours services, they can continue to do so in the way that they choose, but if they wish to enter into a contract for the new part I arrangements, and if they wish to use the vehicle that currently provides an element of what they do and it is not a qualifying body, they cannot. They would have to change the position if they wanted to bid for a pilot and enter into part I arrangements.
There may well be examples, although I cannot think of one, in which the vehicle that GPs use now to provide out-of-hours arrangements would not qualify, but it might be easy for them to reform the system if their principal intention was to provide contracted arrangements under part I. I emphasise that simply to prove beyond peradventure that, under the Bill, there is no loophole that would automatically allow GPs, simply because they are currently providing a service connected with primary care, to enter into part I arrangements if the vehicle that they were using did not qualify under the legislation. It is a belt-and-braces approach, which I hope the hon. Gentleman understands. Otherwise, if GPs wished to participate in part I arrangements, it would be simple for them to act on their overwhelming desire to do so.
The new clauses go even further than what was suggested in Committee. They would impose new and, in our view, unreasonable restrictions on qualifying bodies. Under the hon. Lady's proposals, doctors who form themselves into a company to provide personal medical services and who also wish to do a few hours' work as police surgeons, to carry out insurance medicals or to provide some medical services for local authorities—that is quite common nowadays among GPs who are providing primary health care—will immediately become ineligible to provide personal medical services.
I am not sure whether it is intentional, but those restrictions are far tighter than the restrictions that currently exist. I think that they are unreasonable, and I certainly do not believe that they would command any

support in the medical profession once their impact was realised. I am at a loss to understand what possible purpose they could serve.

Mr. Hugh Bayley: In Committee, the touchstone phrase that was used to describe what was acceptable or unacceptable was "part of the NHS family". The Minister is now saying that a private company whose directors happened to be doctors, and which provided private medical services for the police and the private sector, would be allowed to bid.

Mr. Malone: No.

Mr. Bayley: The Minister says, "No," but that is the only sort of company that he has been able to suggest that would fall foul of the amendment.

Mr. Malone: Unusually, the hon. Gentleman has not entirely understood the purpose of the new clauses tabled by his own party. He is distorting the point, which is that, to qualify either to bid for a pilot or to enter into permanent part I arrangements, the individuals concerned must be members of the NHS family, or form an agglomeration—either a partnership or, as we discussed in Committee, a corporate body. The hon. Gentleman also missed out the other half of the provision: they could not be directors of that corporate body. The total shareholding of the body would have to be owned by members of the NHS family, legally and beneficially. As I said in Committee, that provision was specifically intended to get rid of any suggestion that those people might be put up as front men for a commercial organisation, which would stand behind the practice that was contracting in respect of part I arrangements.
The new clauses would prevent such an agglomeration of doctors—be they arranging themselves as part of a qualifying corporate company or, indeed, a partnership—from providing, as they do now under part II arrangements, a range of private services on their own account. That would be quite exceptional. It would be absurd to extend into part I arrangements a restriction that goes beyond that placed on doctors under part II arrangements. I am not entirely sure whether the Opposition have considered that it would strike at much of what doctors do now. If that was the case and the medical profession understood that that was so, the Opposition would find—as I did on occasions during the passage of the Bill—that the BMA might beat a path to their door pretty quickly. I cannot see that any of the representative bodies would want to put such a restriction on their members.

Mr. Bayley: My hon. Friend the Member for Dulwich (Ms Jowell) listed a number of private health care organisations that felt that they would still be able to bid. My question is simple. Does the Minister regard BUPA and the doctors employed by it as part of the NHS family? Does he regard Sinclair Montrose Healthcare and Unichem as part of the NHS family?

Mr. Malone: It is not a question of whether I believe. Frankly, the stories that we still see rerun in Pulse are grossly overdone. Whenever I have spoken to anybody with any remote connection with those organisations, the last thing that they have done is express an interest in


taking on part I arrangements in primary care. It a question not of my belief, but of examining the Bill and seeing what the shareholding of any company brought together by members of the NHS family would be. The answer is that, as at present constructed, no public limited company with quoted shares, for example, could ever qualify, because the shares would not be held legally and beneficially by members of the NHS family.
I do not know quite how long it will take me to set those fears at rest. Perhaps I have spent long enough in Committee and on Report trying to do so. I cannot make it clearer than that. I certainly do not intend to go through a list of speculative stories that have appeared in Pulse, with no knowledge of the structure of the organisations involved, and rule them out one by one.
I return to the point that I made in Committee. These are clear and firm arrangements, which we shall put in place to ensure that primary care is delivered by members of the NHS family.

Mr. Simon Hughes: What is the result of the Minister's consideration of the idea of a register of GPs' interests? I put that point to him on Second Reading and he said that he would think about it.

Mr. Malone: I am not entirely certain that a specific register would be helpful. Conflicts of interest are regulated by other professional bodies, including the General Medical Council. On reflection, those arrangements have served well over time. If the hon. Gentleman had brought me some evidence to show that they would not serve well in respect of part II arrangements, I might have considered the matter further. They have served well for existing arrangements. I see no reason why they should not serve well under the new arrangements.
Amendment No. 11, in the name of my right hon. Friend the Secretary of State, delivers on the undertaking that we gave during earlier stages of the Bill's consideration and makes it clear that proposals for pilot schemes may be prepared only by health authorities and boards and put to the Secretary of State if they originate from a member of the NHS family as defined in clauses 2 and 3. I commend it to the House.
Perhaps, at long last—I do not live in too much hope of this—I have demonstrated to the hon. Member for Dulwich that the Opposition's new clauses are unnecessary. In fact, they would be downright unhelpful to doctors. I hope that the House will not support the Opposition's new clauses.

Mr. John Gunnell: Will the Minister explain a little further a reply given in the House two days ago to my hon. Friend the Member for Hamilton (Mr. Robertson), who asked the Secretary of State for Scotland to rule out the privatisation of clinical services in the NHS? The Secretary of State said:
We would not rule out any proposal from clinicians themselves.
When pressed further, he added:
if clinicians brought forward a proposal, we would consider it, and would not rule it out in principle."—[Official Report, 10 March 1997; Vol. 292, c. 35.]

He rather sidestepped the question that was put to him about privatisation of clinical services in the NHS and made it clear that, as far as he was concerned, he had not quite abandoned the idea of a different provision. It is very clear to us all that the Department of Health has been preoccupied with the privatisation of services recently. This afternoon's statement by the Secretary of State for Health illustrated that only too well.
It is also clear that, despite the Minister's words, we have not quite expunged the idea of the privatisation of GP services. When the Secretary of State for Health spoke after the Queen's Speech, he was extremely clear that he was looking to privatise GP services. We have not expunged that from the minds of those who seek to provide those services. My hon. Friend the Member for Dulwich (Ms Jowell) quoted them today. Recently I saw a statement in Pulse from the chief executive, who said:
An amendment will not make any difference to our plans. We will still provide NHS services and have GPs working from our premises and using our facilities around the country.
People are quite clearly seeking a way round it, whatever amendments the Minister tables.
My hon. Friend's new clauses make it absolutely clear that we would completely rule out any privatisation, and the wording that we use is absolutely clear in that regard.
I congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on his maiden speech and on reminding us that a key issue in the campaign was the national health service. People do not believe that the Conservatives have entirely abandoned the idea of privatising the service. It is clear that they have abandoned the privatisation of very little in this country. There is no reason to believe that the Secretary of State's real view, which he put to us at the end of last year, has fundamentally changed.
Consultations that the Minister has had made him table amendments that are quite different. We know that the committee that discussed the Bill and its wording was the committee of the BMA, not a Standing Committee in the House. We had to wait until the BMA's committee had completed its negotiations before we could begin to discuss the Bill. The Minister has tabled amendments that appear to satisfy members of the BMA, but there are many outside the BMA who will seek to erode and work at the edges of what he said.
People are still concerned about the future of their health services. It is significant that health services and people's fears about them were a significant factor in bringing my hon. Friend the Member for Wirral, South here to make his maiden speech today.
The comments made by the Secretary of State for Scotland show that he is still hedging his bets. Such statements make us realise that, whatever is said, Conservative Members cannot wait to privatise GP services. Given a fifth term in office, I am sure that they would do just that. We are still right to warn the public that that is a possibility if the Conservatives are re-elected.

Mr. Bayley: I, too, congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on an extremely good maiden speech, which highlighted the importance that he attaches to improving health care in the Wirral. I am sure that that will happen under a Labour Government. I am sure that he will be an active Member for his constituency under a Labour Government, and will continue that campaign.
Every time the Minister is kind enough to let me intervene in his speeches, whether on the Floor of the House or in Committee, he makes the Government's intentions clearer: to leave the door open to allow the commercialisation of primary health care. If that was not the case, the Minister would have accepted the new clause of my hon. Friend the Member for Dulwich (Ms Jowell), or if he could not bring himself to accept an Opposition proposal to protect NHS primary health care services from commercialisation, he could have tabled his own amendment. He claimed that the amendment that he tabled in Committee would achieve that, and that the bidding for pilot schemes to provide primary health care services would be limited to members of the NHS family. But it has now become clear that the Minister's NHS family is an extremely extended family: it includes suitably experienced medical practitioners, whether they work for the NHS or not.
The Opposition object to that, because, as the Bill is currently drafted, a team of doctors—they would doubtless be good doctors, suitably experienced and qualified to provide primary health care services—who worked in the private sector as private practitioners outside the NHS could bid to provide NHS services paid for by the NHS. Such people do not strike me as being part of the NHS family.
7.30 pm
The Minister said that under the amendment that he tabled in Committee—which is now clause 2—those who will be able to bid for primary health care services will include suitably experienced medical practitioners, whether or not they work for the NHS. We debated in Committee the possibility of their being medical practitioners employed by a pharmaceutical company, who could propose a pilot scheme to improve immunisation levels in parts of the country where immunisation levels were low. As individual practitioners, or as individual members of a private company that counted as a qualifying body and could bid, they would not be able to pass profits made from the work that they undertook on contract to the NHS back to their main employer, the phannaceutical company.
Those people would work on contract to the NHS in an individual capacity or as part of a qualifying body—a private company—limited by guarantee, but they could do what my hon. Friend the Member for Dulwich suggested and, as practitioners operating a pilot scheme, they could commit NHS resources to purchasing secondary health services from their parent company. The legislation does not rule that out, although it should, and it would be ruled out if the Minister accepted our new clause.
In the interests of brevity, I shall put a final point to the Minister. Would it be possible for medical practitioners from abroad who qualified under clause 2 as "suitably experienced medical practitioners" to bid to run pilot schemes? Does the Bill permit that? Would an American health maintenance organisation be able to put in a bid to run a pilot scheme?

Ms Jowell: This has been a crucial debate. It has focused on the part of the Bill on which the Government and the Opposition are divided. As my hon. Friend the Member for Wirral, South (Mr. Chapman) made clear in his excellent speech, one of the main reasons why the

people of Wirral, South elected him and came over to new Labour in their thousands was to see off the threat of privatisation and to enable the restoration of the NHS service as a public service. It was a tremendous vote of confidence in new Labour and in my hon. Friend, who we know will provide excellent representation for his constituents for many years to come.
We should like to associate ourselves with the kind tribute that was paid by my hon. Friends the Members for Wirral, South and for Birkenhead (Mr. Field) to Barry Porter, who was a much loved local Member of Parliament. He was greatly admired for the courage with which he faced the cancer from which he died.
It is not my intention to elaborate on the Minister's analogy of corpses, funerals and life-support machines, all of which are more fitting to the Government than to our determination to see privatisation written out of the Bill. We shall withdraw the motion, because we hope that within a few weeks another means will be available to us to safeguard the national health service from the threat of privatisation, and that will be the election of a Labour Government.

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 4

EVALUATION OF PILOT SCHEMES

'.—(1) Each pilot scheme must be evaluated and reported upon by the Secretary of State at least once.
(2) Each pilot scheme must be reported upon under this section before the end of the period of three years beginning with the date on which the agreement with the authority is made.
(3) When evaluating each pilot scheme, the Secretary of State must consult—

(a) the authority concerned,
(b) any person providing services under the scheme,
(c) the relevant local representative or local consultative committee (as appropriate),
(d) the relevant community health councils or local health councils (as appropriate),
(e) patients and organisations representative of patients.
(f) the Medical Practices Committee or the Scottish Medical Practices Committee (as appropriate), and
(g) such other persons or bodies as he considers appropriate.

(4) The Secretary of State shall include in this report of the evaluation of each pilot scheme details of the consultations he conducted under subsection (3) above and a statement of what account he took of the views expressed in reaching his conclusions.
(5) The Secretary of State shall make a report on the criteria which he proposes to use in his evaluations of pilot schemes under this section, and before making such a report he shall publish a draft report and give an opportunity to such organisations as he sees fit to comment on his proposed criteria.
(6) Each report made under this section shall be laid before Parliament.'.—[Mr. Chisholm.]

Brought up, and read the First time.

Mr. Malcolm Chisholm: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With this, it will be convenient to discuss the following: New clause 7—Local representative and consultative committees—

'.—(1) Section 44 (local representative committees) of the 1977 Act shall be amended, in subsection (1), by inserting—

(a)in paragraph (a), after the word "services" where it occurs for the second time, the words "or services provided under section 28C arrangements"; and
(b)in paragraph (b), after the word "services", the words "or services provided under section 28C arrangements".
(2) Section 9 (local consultative committees) of the 1978 Act shall be amended, in subsection (1), by inserting—

(a)in paragraph (a), after the word "practitioners", the words ", including those providing services under the section 17C arrangements,"; and
(b)in paragraph (b), after the word "practitioners", the words ", including those providing services under section 17C arrangements,".'.

Amendment No. 58, in clause 7, page 6, leave out lines 2 to 13.

Amendment No. 9, in page 6, line 12, at end insert—
'(5) Before 31st March in each year, the Secretary of State shall lay before Parliament a summary report of the reviews of pilot schemes conducted in the previous calendar year in—

(a) England,
(b) Scotland, and
(c) Wales,
including an overall summary of the effect, or anticipated effect, of the pilot schemes reviewed (together with other pilot schemes in operation) on the distribution of general practitioners and dental practitioners.'

Mr. Chisholm: New clause 4 is a substitute for clause 7, which we regard as inadequate. The problem with clause 7 is that it contains nothing about the criteria to be used in evaluating pilot schemes prior to their being adopted as more permanent arrangements. The clause contains nothing about consultation or about a report to Parliament. It could be said that it contains nothing much about evaluation, as it refers to the weaker and more problematic concept of a review.
In Committee, we discussed this matter at great length, and the Minister was resistant to the concept of evaluation. He seemed to wilfully misrepresent or misunderstand our proposal. [Interruption] I should make it clear that he misunderstood our proposal. On 25 February, the Minister said:
If one particular matter, for example, evaluation, were included in the Bill, it would be raised to unmerited importance in comparison with a range of other matters that would not be included.
He went on to say:
Including evaluation in the restrictive imperative way set out in the amendments would not be helpful.
Our amendments proposed that criteria should be laid down for assessing the value of any particular pilot scheme. We were merely repeating the suggestion in "Choice and Opportunity" that pilots should be evaluated against the criteria established at the start. The Minister said:
there are many other factors, such as the impact of the scheme on other NHS services and other providers. We need thoroughly to consider all possible evaluation criteria before making the rules, instead of picking and choosing issues for inclusion in the Bill."— [Official Report, Standing Committee D, 25 February 1997; c. 88–90.]

That is where the misunderstanding comes in. We were not suggesting that the criteria should be detailed in the Bill. The new clause provides precisely the mechanism by which there can be thorough consideration of the evaluation criteria, to which the Minister referred. I hope that he will therefore welcome our new clause.
Once the criteria are established, we propose that there should be an evaluation of each pilot scheme, with the widest possible consultation. New clause 4(2) says that, after that, a report using the criteria should be made within three years, including details of consultation and what account was taken of it, which should also go out to wide consultation. Proper evaluation is at the heart of making a success of the Bill and the innovation in it.
The new clause was drafted a long time before this week, when I received a briefing from the British Dental Association. Since I shall refer mainly to medical rather than dental matters, it might be interesting to quote the BDA's comments, which seem by coincidence to take up exactly the same concerns as those expressed in the new clause. The briefing, which I am sure other hon. Members have received, says:
the Secretary of State must consult both nationally and locally with representatives of the profession and consumers on pilot scheme evaluation and account must be taken of their views. The nature of the pilot reviews should be more clearly spelt out: they should be independent, with prior agreement on criteria for quality and service outcomes.
there must be opportunity for Parliamentary debate prior to regulations being made for permanent arrangements which may fundamentally change the provision of NHS dental services.
The importance of evaluation is very clear when we consider the dogmatic approach to the health reforms that were introduced by the Government at the beginning of the decade. In primary care, the dogmatic approach to GP fundholding is probably what we remember in particular, although my hon. Friend the Member for York (Mr. Bayley) referred in Committee to the way in which the new GP contract was also not properly evaluated. He referred to a report from the Centre for Health Economics at York university, which pointed out how the GP contract had not been evaluated. It said:
Without such evaluation, the 'next' reform of the GP contract may be based on hope rather than knowledge. No hopes, however sincere and well meant, can substitute for knowledge in the formulation of health care reforms aimed at using scarce NHS resources more efficiently.
My hon. Friend did not say whether he had written the report himself, but it was certainly of high quality.

Mr. Bayley: I can tell my hon. Friend that I had nothing whatever to do with the report, and had absolutely no interest—commercial or otherwise—in it. It was not a matter of free advertising. I was referring to an independent study, which I felt members of the Committee should bear in mind.

Mr. Chisholm: I thank my hon. Friend. I found the reference useful, because it illustrated, in the GP contract, a lesser-known example of the Government's failure to pilot and properly evaluate primary care reforms.
The better-known example of such failure is GP fundholding, which was driven through in a dogmatic way, and has still not been properly evaluated. In fact, the evaluation by the Audit Commission was resisted all the way by the Government, which is, of course, not


surprising, since the report's conclusions were not favourable. We all know how it pointed out that the costs of GP fundholding far outweighed any benefits.
We are glad that the Government have, at least to some extent, seen the error of their ways in proposing pilot schemes, but we are not satisfied that they have totally seen the error of their ways, because they have not given the required attention to the evaluation. That is why we want it in the Bill. We hear much about evidence-based medicine; what we also want is evidence-based policy making. The Minister can hardly object in principle to setting out criteria in the Bill, because he said in Committee that the criteria for evaluation will be set out by the national consultative group.
We feel that a non-statutory ad hoc committee is not enough. It may well have a role to play in making proposals, but evaluation cannot just be left at that, not least because there is no requirement that the views of that ad hoc committee—I should say committees, since there is one for England and one for Scotland—should be heeded.
Thewords of the Minister are important, because they show that he accepts that criteria for evaluation can be set out. The new clause is asking that the criteria be set out in a report, and that the report be open to public consultation and debate in the House. I cannot see how the Minister could possibly object to that aspect of the new clause.
7.45 pm
Our main concern about the Bill, as we expressed frequently in Committee, is that deregulation could result in further fragmentation of primary care services, with wider variations and possible loss of service. We believe that evaluation is critical to ensure that that does not happen. It does not need to happen; we do not expect it or want it to happen, but it could happen without proper evaluation.
The key issue in evaluation is quality, which is why Opposition Members have started to talk about an effectiveness index for the health service, rather than an efficiency index that measures the quantity of care. At the heart of our health policy is a desire and an intention to lever up quality in primary and secondary care.
Wide discussion of criteria that are adopted to assess any pilot scheme and reach decisions on it must include questions on quality. Has there been an improved quality of care? Is that recognised by patients? Have the outcomes that were set out been achieved? What effect has there been on other providers—not only other doctors but other services and patients? Cost-effectiveness is, of course, part of evaluation.
A further aspect must be evaluation against existing practice. That was perhaps the problem with the absence of evaluation of GP fundholding. When GP fundholders lobby me, they sometimes talk about changes that have been brought about by GP fundholding. I say to them, "Well, other GPs who are not fundholders have developed in that way because there have been developments in primary care. The changes are not dependent on fundholding." Any primary care service must be compared with other services to see whether the developments are intrinsic to one model, or whether they could occur under some different model.
We believe that criteria should not be determined solely by either the Secretary of State or his committees, which is why we want consultation on them. I should say

Secretaries of State, since we are talking about two—in fact, three. Criteria must be developed in consultation with the public and professionals.
The emphasis of the new clause is on the importance of consultation as part of any evaluation. Seven groups are listed in subsection (3). Paragraphs (a) and (b) refer to "the authority concerned" and
any person providing services under the scheme".
Those two groups are the same as the two referred to in clause 7 in relation to the Government review. Paragraph (c) refers to a
local representative or local consultative committee".
I shall say a little more about that in relation to new clause 7, but in passing I should point out the importance of either of them as watchdogs.
Paragraph (d) refers to
the relevant community health councils or local health councils".
I referred to that in Committee, pointing out that I was concerned that there did not appear to be any specific reference to community health councils in the Scottish document outlining plans for the pilots. I emphasized:
Their input, not to mention their role in conducting consultations and disseminating information, is crucial."—[Official Report, Standing Committee D, 25 February 1997; c. 88–111.]
I note that, at column 112, the Minister said that he would examine the matter carefully and, if necessary, write to me. Obviously, it was not necessary, but perhaps he can tell us the results of his examination of that.
Paragraph (e) refers to
patients and organisations representative of patients".
They must also be consulted with reference to any pilot, because evidence-based health care must take account of patients' views of effectiveness. That must be a key criterion when we are considering evaluation.
Paragraph (f) refers to
the Medical Practices Committee or the Scottish Medical Practices Committee".
I had better not say too much about that, as my hon. Friend the Member for Cardiff, West (Mr. Morgan) is going to talk about it in the debate on the next new clause. I was going to talk about it, but the new clauses were not grouped in the way that we had imagined, so I have ended up talking about his new clause 7, and he is going to talking about my new clause 5. However, I will say in passing that that relates crucially to the issue of GP distribution, about which he will say more. Paragraph (g) is for anyone else who does not fit into those categories.
Therefore, at the heart of new clause 4 is the importance of consultation as part of evaluation. That is the way in which we want to open out the health service, so that health decisions are made not just by the Secretary of State, or even by GPs, health authorities or health boards, but, crucially, by the public. It is important that they are involved in decisions about the health service. That is embodied in our new clause. Once that full-scale consultation has been carried out as part of the evaluation, we are saying that a report about a particular pilot must be laid before Parliament, because the evaluation must be open to scrutiny.
New clause 7 refers in particular to local medical committees and their role. As currently worded, the Bill does not provide for those committees to be recognised as representative of GPs involved in pilot schemes, as they


are of GPs working in the existing system. The new clause would ensure that pilot scheme participants are allowed the same representation and involvement in the local organisation and administration of NHS general practice as their part two colleagues—those involved in traditional GP services.
We believe that it is important that local medical committees are able to represent all GPs, if they are to continue to perform their existing statutory functions effectively, and to fulfil the important role envisaged for them in advising on the establishment of pilot schemes, and developing local work force plans with health authorities.
Local medical committees provide a source of advice to health authorities and boards, which is trusted by GPs and by the authorities. The fact that the committees are representative of all GPs within a health authority or board and carry the confidence of the profession means that they are able to comment authoritatively on a wide range of issues. They provide a means by which health authorities or boards can involve GPs in local planning and give doctors a sense of ownership, which is so important in maintaining the good will of GPs in developing the primary care-led NHS.
Local medical committees provide professional input and expertise to local planning on subjects such as GP-led commissioning, health authority or health board purchasing, the distribution of resources and patient education activities. The committees will not be able to do that so effectively, or continue to have the full confidence of health authorities, boards and GPs if the new category of GP—those working in pilot schemes providing personal medical services—are excluded from the process of consultation and representation.
Examples of the role played by local medical committees include matters concerning the administration of the GP contract and providing the health authority or board with views and advice on a range of matters. They play an important role in NHS complaints and disciplinary procedures, and are also involved in monitoring professional performance. Many of those local medical committee functions will apply equally to GPs working in pilot schemes.
Furthermore, information and advice on professional development, health promotion activities and complaints handling can all be disseminated widely through the local medical committee structure. GPs working in pilot schemes under part I of the Bill should similarly be in a position to receive such advice from a local medical committee.
Labour's plans for primary care centre on the ending of two-tierism, the levering up of quality and the securing of innovation within a coherent strategic framework. The last thing we want is new varieties of fragmentation and two-tierism, either of primary care services or of the primary care work force. To avoid that, it is essential that the new clauses are taken on board.

Mr. Peter Thurnham: Before speaking to amendment No. 9, I should like to add my congratulations to the hon. Member for Wirral, South (Mr. Chapman) on his excellent maiden speech. The

Minister may recall that I made my maiden speech on the British Telecom Bill, and shared many hours on Committee with him.
I should like also to endorse the eloquent testimony given by the hon. Member for Birkenhead (Mr. Field) to the late Barry Porter. I remember my shock on learning that he was so ill. I know that he fought his illness bravely up to the last weeks of his death. The sense of loss is shared not only by North-West Members, but, I am sure, by all Members on both sides of the House.
Amendment No. 9, which stands in my name and that of my hon. Friends, is similar to an amendment that we debated in Committee. I hope that the Minister will be able to give a slightly fuller reply than he was able to in Committee to the points I raised. The amendment has been changed to make it, I hope, more acceptable to the Government. It calls for an annual report to Parliament of reviews of the pilot schemes in England, Scotland and Wales, including an overall summary of the pilot schemes' effect on the distribution of both general practitioners and dentists.
The amendment is strongly supported by the Consumers Association. It is a sensible addition to the Bill to see whether it is achieving its aims. One of the Bill's principal purposes is to achieve more even and equitable distribution of primary care. Clause 5(4) ensures that the Secretary of State must have regard to the effect that pilots are likely to have on the distribution of GPs when he approves pilot schemes, so it seems only sensible that Parliament should be given the opportunity to find out whether pilots are being successful in achieving that end. The amendment provides for an annual report to Parliament on the effect of pilot schemes on the distribution of primary care services.
The Minister will, I am sure, recall that, during the debate in Committee, I touched on some of the regional variations of which we are only too well aware in the north-west. In 1980, the Black report highlighted many of the unfavourable variations there. Sadly, many of those variations are still with us.
In Committee, I discussed three examples concerning children's services, renal services and dental health. I could, of course, discuss others, including heart disease. The north-west has the worst record on early heart disease of any district in England.
I remind the Minister of the points that I made in Committee about perinatal mortality rates in Bolton, which are substantially above the national average. The figures for the past five years show that, in Bolton, still births and deaths within one week, which are, of course, tragic events, are 40 per cent. above the national average. There has been no improvement in the past five years, and the national average is deteriorating, so I call on the Government to encourage pilot schemes that would particularly address that issue, and to find out whether we cannot have some improvement in that respect.
On the same subject, there is considerable concern in Bolton about the future of the specialist children's hospitals at Pendlebury and at Booth Hall. I hope that the Minister will say how the Government will come to a decision about the future of the services in those two hospitals. Both face closure proposals. I hope that a decision will be made at an early date to concentrate the services at Hope hospital, for the benefit of my constituents.
The other point I made in the Committee's debate on the Bill was on renal services. I was very shocked to learn that the north-west has the worst renal services in the country. I learned, in a letter to me from the director of the Salford Royal Hospitals NHS trust, that there could be many benefits from an improved service and that, currently,
only half the patients who could benefit from life-saving dialysis therapy are on treatment"—

Mr. Deputy Speaker: Order. The hon. Gentleman is straying rather wide of new clause 4 and amendment No. 9.

Mr. Thurnham: The consultation documents mention the proposals' benefits to primary services. I think that it is most important that we have primary services that deal with the concerns of renal patients. The disconnect service, for example, is not available in the north-west, and it would be of great benefit to many people there. Moreover, primary care services require that such services should be located within the reach of constituents. We could have twice-weekly renal clinics, dialysis within the district and a specialist renal physician working closely and often daily with clinicians and other health care professionals in the community and in hospitals.
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I call on the Minister to make an early decision on the future of those services, and to provide them at the Manchester Royal infirmary and at the Hope hospital. I hope that he will tell us in his reply how he will deal with the issue.
We have also been concerned about the north-west's very poor record on dental health. The Minister is aware of my concern on that matter, and he will remember the White Paper "An Oral Health Strategy for England", which contains a map clearly showing that the north-west region is much the worst region for dental health. The figures on the map are supported by tables published by the British Association for the Study of Community Dentistry, which, sadly, show that Bolton is at the bottom of the national league table, with north and central Manchester. It is significant that the bottom 12 areas, all of which are in the north-west, suffer—

Mr. Deputy Speaker: Order. I hesitate to stop the hon. Gentleman again, but new clause 4 deals with pilot schemes. I hope that he will confine his remarks to that matter, and that I do not have to pull him up again.

Mr. Thurnham: Mr. Deputy Speaker, the point on which I wish to press the Minister is that he should encourage the establishment of pilot schemes that will deal with the regional differences that I have mentioned, which are acute in the north-west. My constituents are anxious that there should be improvements in dealing with those differences, and that pilot schemes should be established which deal with the differences.
I ask that the Minister tell us in his reply what can be done with pilot schemes to deal with those severe differences, which have developed not only generally in the north-west but specifically in dental health in Bolton. In Committee, I quoted figures that showed that children's dental health in my area has deteriorated to a point at which it is now the worst in the UK.
I do not wish to press my amendment to a Division, but I hope that the Minister will either accept it or provide a very full explanation of the Government's feelings on the matter.

Dr. Tony Wright: From the moment that the Bill first appeared—even before, during its gestation period—everyone who was involved in thinking about it and commenting on it said that the process of evaluating pilot proposals would be the most crucial factor in its success. There could be no objection—indeed, there was wide welcome—that the Government were proceeding to develop primary care on a pilot basis. The important questions, however, were, how were those schemes to be evaluated, against what criteria, who would be involved in the consultation process, and how were reports to be made on the outcome of the projects?
In Committee, those questions were repeatedly asked of the Minister. His answer has always been to trust him to take a view on the matter. He has a committee, and, although it is a splendid little committee, he seems to be saying, "We will make judgments on those matters, and the House need not trouble itself with them." The House must decide whether it is satisfied with that arrangement, or whether it wants to impose framework obligations on the Minister.
It is quite routine in legislation empowering Ministers to require them to report on the discharge of those powers. Scarcely a day passes without the House producing a document—which is avidly read by all hon. Members—requiring Ministers to account for the powers provided by legislation.
It is very strange that at the centre of this legislation are the questions of what type of evaluation will occur, against what criteria, and who will be involved? From the beginning, the Government did not think that it was important to insert that type of criteria into the Bill. I am sure that the Minister will tell us again today that it is not the House's job to specify the criteria or to specify in detail what should be taken into account in evaluating specific pilot projects. I agree with that. However, the House should insist that there is an identified and established process by which pilots will be evaluated, and it should specify who will be involved in them.
I think that the failure to take that action will eventually be regarded as the Bill's major omission. It is important that Ministers did not feel it necessary to correct the omission. Moreover, as I look at the acres of emptiness behind the Minister, I can only remark that the House has not felt itself obliged to remedy it.

Mr. John Heppell: I think that the Minister knows that I am rather keen on passing this legislation, which is why I hope that I can persuade him that it is a good idea to support new clause 4.
I am keen on the Bill because, unlike many hon. Members, I live in an area in which the majority of doctors—in a ratio of 4:1—have not become fundholders. Those non-fundholders, as they call themselves, set up a scheme of their own by which they could be involved in commissioning work. They would have liked to go further with the scheme and achieve total commissioning instead of total fundholding, because it had all the benefits of fundholding without all the bureaucracy. Therefore, this legislation would allow non-fundholders to take their scheme one step further in providing a better services to their patients.
As many of my hon. Friends have said, the Bill's one omission concerns clause 4, because pilot schemes become almost useless without proper evaluation and consultation. If there is no evaluation, how will we know what is the best practice or what has failed? How will we pass on information from good schemes to GPs in other parts of the United Kingdom? Without proper evaluation, pilots become pointless or merely local exercises. They may fail or they may succeed, but they will be concerned with only one area. Even if a scheme is successful, similar schemes may be started from the beginning in other areas, again and again, because information from pilots has not been evaluated and passed on.
People say that the Minister never considered the idea of evaluation criteria at the Bill's inception, but that is not true, because the idea was spelt out clearly in the Government's White Paper "Choice and Opportunity", which expressed a general approach to piloting. The paper contained about seven or eight bullet points, all of which I will not read out. The first was:
ideas for pilots will be formulated locally"—
and so they continue.
The point that is particularly relevant—it has been mentioned already in the debate—states:
pilots will be evaluated against the criteria established at the start and taking account of the views of those involved and affected.
That is quite clear, and I thought that it was the Government's intention.
In addition, the White Paper identified safeguards for patients and practitioners. It said that the Secretary of State should be able to make arrangements for the evaluation of a pilot, including
approving the criteria and process",
requiring health authorities to monitor the quality of the service provided and to provide information locally about the pilot to those affected, particularly on the quality, volume and cost of services to ensure that patients were protected and taxpayers received value for money and on the
criteria for evaluation and the process for doing so.
Very few of those commitments are on the face of the Bill, which is weakened by their omission. New clause 4 also makes provision for proper consultation with a range of bodies, including community health councils, professional groups and the Medical Practices Committee.
I have made my position clear to the Minister in other discussions, but I should like to draw attention to the provision in new clause 4 to ensure that local medical committees can continue to act as watchdogs. I am confused about why the Minister will not put that on the face of the Bill.
Perhaps the Minister recalls the words of the Chancellor of the Exchequer on a BBC 2 programme "Safe with Us" in respect of previous NHS reforms:
I was sure if you isolated a few places as pilots, all the best efforts of the BMA element in the medical profession would be bent to ensure that it failed.
That may be part of the problem. The Government treats local medical committees as if they were trade unions. I do not dispute the fact that local medical committees look after the interests of general medical practitioners.
That is part of their role, but they also look after the interests of general practice. There is a difference: they look after the interests of patients as well as doctors.
Local medical committees have been operating since 1911, well before the formation of the national health service. Since 1911, they have been consulted by NHS executive councils, health authorities and, before them, insurance committees. Why should the Minister suddenly decide that local medical committees should no longer have a role in these matters?
My local medical committee represents all the doctors in the area—fundholders and non-fundholders. It speaks for all general practitioners and should be consulted. If local medical committees are not consulted, we shall lose out in terms of the professional advice that general practitioners can offer in medical and administrative matters.
Baroness Cumberlege stated in another place that consultation in the NHS was standard practice. As far as I am concerned, there is no standard practice of consultation at any level in the national health service. Nowadays we have public relations. People produce glossy brochures telling us all the good points of any proposal. It happens at every level—in trusts and health authorities. We never hear the bad news until it is too late. Nor are we told about any proposed changes to the health authority until they are so advanced that we can do nothing about them.
Consultation in the health service has become a farce, with supposedly public meetings packed with health authority and trust staff rather than the general public. If the Minister really believes that the general public are being consulted, he should realise that, if he were not a Minister, he would not find it easy to get information out of certain trusts and health authorities.
The Minister may not know that I have written two letters to the Secretary of State about the fact that neither I nor the general public were consulted about multi-million-pound schemes in my constituency. We knew nothing about schemes that had been in place more than a year. I asked the Secretary of State whether that went against the Government's code of practice on openness for the national health service. He did not reply yes or no, so I wrote to him again asking, "Doesn't this go against your code of practice on openness for the national health service?" Again he wrote back without saying yes or no. So I shall write to him again.
8.15 pm
About a week after I had written my second letter to the Secretary of State, I received a letter from the NHS executive headquarters about the code of practice on openness in the NHS. It was addressed to all Members of Parliament, and it said:
Dear Member of Parliament…I enclose a copy of the Code of Practice on Openness in the NHS.
A report by the Health Service Commissioner on access to official information in the NHS was recently considered by the Select Committee on the Parliamentary Commissioner for Administration. The Committee were concerned over the Commissioner's findings that there appeared to be a lack of public awareness of the Code of Practice on Openness for the NHS and therefore asked me to arrange for a copy to be sent to each Member of Parliament for information.
I have some advice for the NHS executive. It should send out a few more copies to chief executives of NHS trusts, chairmen of health authorities and many others who


are not applying the code. I know about the code, but it is fairly obvious that many in the health service do not. That is why it is even more important that we restore some credibility to the health service by ensuring that there is proper evaluation, and, more importantly, proper meaningful consultation with all groups, including local medical committees.

Mr. Malone: I have listened to the debate on new clause 4 wondering whether I would hear any new or more compelling arguments than we heard in Committee. With respect to hon. Members, who pressed their suits as vigorously as they did in Committee, I have to disappoint them, and say that I did not hear much to persuade me that I should accept the new clause. I shall explain briefly why, but first let me turn to two specific points that were raised by the hon. Member for Bolton, North-East (Mr. Thurnham).
In the context of this evening's debate, I shall not respond to his point about reconfiguration of services in which he has an interest. However, I have noted his comments, and I shall reply to him through other channels and let him know the up-to-date position.
The hon. Gentleman made another point about dental pilots, which could be relevant to the debate in terms of amendment No. 9. I envisage the pilots to which he referred dealing with problems of oral health care in centres of population where oral health is poor. That is the purpose of the Green Paper that preceded the Bill. I can give the hon. Gentleman the assurance he seeks, that the pilots are specifically designed to solve such problems.
As I have said many times, we are committed to evaluating the pilot schemes in a open and consultative manner. I remind the hon. Member for Edinburgh, Leith (Mr. Chisholm) that there is a statutory underpinning for that in that clause 7, which commits us to evaluating each scheme within three years of its beginning to provide services. The question is whether we should set out criteria on the face of the Bill. I have not changed my view, although we have every intention of setting criteria for evaluation.
The hon. Member for Cannock and Burntwood (Dr. Wright) described the national consultative group as a small committee. I was trying to signal to him that a large, wide group will consider criteria that will apply to all schemes.
The universal criteria will be based on the advice of the groups and the local criteria on the work of health authorities and providers. They are likely to cover issues including quality of services, the wider impact on the provision of local general practitioner and dental services—returning to the point made by the hon. Member for Bolton, North-East—administrative efficiency and value for money. With a wide variety of schemes, some of them fairly small, an elaborate system of reports for each would be unnecessary, and out of proportion to other scrutiny arrangements. There is no need for such a requirement.
We believe in using the established mechanisms, well known to the House—Select Committee inquiries, parliamentary questions and debates. From nearly three years' experience as a Minister for Health, I know that some hon. Members are not slow to use such devices to air their concerns. Those are the appropriate ways to deal

with such matters, ensuring that information is made available to Parliament and obtained in the form required. The process envisaged in the amendments is likely to be unwieldy and bureaucratic. It may be appropriate for large schemes, but not for the many smallish schemes that we anticipate.
The hon. Member for Leith asked about community health councils. I looked carefully at what I said in Committee, when I answered the point in another way. Community health councils will be consulted in two ways. I expect them to be consulted in the general sense, but I also pointed out in Committee that they have a statutory right to consultation if what is being proposed in a pilot amounts to a major service change. They are reassured by that.
I should like to clarify the Government's position on the issues exposed by new clause 7 on local representative committees. They will play an important role in the development of the new arrangements. Health authorities will need to seek their views on the impact of pilots on existing arrangements and when pilots are evaluated. They will definitely be involved, continuing the long-standing relationship between health authorities and LRCs in the provision of general medical and dental services.
I have an important opportunity this evening to set out my views on the future arrangements and the statutory role of LRCs. The statutory role and funding of LRCs relates to the existing general medical services and general dental services contracts, and various functions performed under them. However, they have also voluntarily undertaken other roles relating to professional matters outside those that are statutory and funded, in which they have been a helpful forum for seeking representative views of GPs and general dental practitioners. That has grown up without the protection of statute.
Health authorities will continue to need to seek representative views on such non-statutory matters that affect all GPs, GDPs and dentists working elsewhere. In doing so, they will need to embrace all those providing primary care services. The mechanisms for securing that should be decided locally by GPs and dentists. I expect LRCs to continue to demonstrate their strength as representative organisations across a spectrum of activity outwith their statutory responsibilities.
In the light of what I have said, I hope that hon. Members will accept that the arrangements in the Bill are the best way forward, showing our strong and genuine commitment to the principle of consultation. I hope that they will not press the amendments.

Mr. Chisholm: I have two points in response to the Minister. First, he repeated the claim that evaluation was already provided for in clause 7. Leaving aside the issue whether a review is evaluation, the fundamental point is that there is no provision for adequate consultation in the clause. That is our main objection, quite apart from the lack of any mention of criteria.
The Minister persists in repeating his assertion in Committee that we wish to put criteria in the Bill. There is no mention in the amendments that we moved in Committee or in the new clause of putting criteria in the Bill. We are merely asking the Secretaries of State for Health, for Scotland and for Wales to make a report on


the criteria. The Minister has conceded that criteria for evaluation will be set out by the national consultative committees. Why cannot that be presented as a report for proper consultation? The Minister has not answered that point, because he has no valid objection to our proposal.
Clause 7(4) says:
the procedure on any review is to be determined by the Secretary of State.
That reminds us that the best safeguard for the clauses is a new Secretary of State in a new Labour Government. In view of that, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 5

PRIOR APPROVAL OF MEDICAL PRACTICES COMMITTEE FOR AGREEMENTS

'.—(1) In the 1977 Act, before section 28C (as inserted by section 21(1)), insert—

Prior approval of agreements by Medical Practices Committee

28BB. Before making an agreement which relates to the provision of personal medical services under section 28C below, a health authority shall submit the proposed agreement to the Medical Practices Committee, and an agreement shall be subject to the approval of the Committee as if section 30 applied to the services proposed to be provided under that agreement".

(2) In the 1978 Act, before section 17C (as inserted by section 21(2)), insert—

Prior approval of agreements by Medical Practices Committee

17BB. Before making an agreement which relates to the provision of personal medical services under section 17C below, a health board shall submit the proposed agreement to the Medical Practices Committee, and an agreement shall be subject to the approval of the Committee as if section 20 applied to the services proposed to be provided under that agreement.".'.—[Mr. Chisholm]

Brought up, and read the First time.

Mr. Rhodri Morgan: I beg to move. That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 61 and 64.

Mr. Morgan: My hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) said that our original expectation—which was somewhat confounded by the way in which the clauses were grouped—was that he would speak on the Medical Practices Committee and I would speak on consultation and evaluation. However, we do not complain about how matters have turned out: we regard it as part of the multi-skilling schemes of the kind that you probably remember, Mr. Deputy Speaker,

with the Coal Board, when the electricians had to learn a bit about plumbing and plumbers had to learn a bit about electrical work.

Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Gentleman, but it has just been drawn to my attention that he is not on the list of those who tabled the new clause, so another Member must move it formally.

Mr. Chisholm: I beg to move, That the clause be read a Second time.

Mr. Morgan: I think that I was picked as a scrum half—I hope that you will excuse my obsession with the events of next Saturday, Mr. Deputy Speaker—as I was the seventh name down and therefore in the second line. I appreciate your point and your correction on that technicality.
We are in the unusual position of trying to restore the reputation of the Secretary of State for Health. On Second Reading, he said that the position of the Medical Practices Committee in the existing red book contract remained unchanged by the Bill. The new clause would make those words true. Unfortunately, without the new clause there is a problem. As the Secretary of State has already had his previously fairly untarnished reputation heavily tarnished over the past few weeks by his comments on Scottish devolution and the European single currency, perhaps it is time for us to help him to burnish his reputation to what it was before he embarked on his new-found middle-aged obsession with banana skins.
The new clause goes to the heart of the philosophy of the Bill. That philosophy has two aspects. One is to let a thousand flowers bloom and have some ideas from the medical and other professions in the national health service family to improve the health care of the nation through the NHS. The other is to try to do that against the problem best encapsulated as the law of inverse care—that those with the fewest health problems tend to get the best health care, while those with the greatest problems tend to get the poorest.
8.30 pm
Since the foundation of the NHS. the Medical Practices Committee has tried to prevent the inevitable drift of the medical profession towards the areas of the country with the fewest health problems. Through its negative vetting power, it tries to correct that by pushing doctors into areas with fewer doctors and more health care problems. The Bill will remove that power and transfer it to the health authorities.
We find that odd. The purpose of the Bill is to improve health care, but it weakens one of the mechanisms preventing the law of inverse care from operating. The Government have taken on board some of the complaints made by the Medical Practices Committee in that regard and have dealt with those in their two amendments—No. 61, which deals with England and Wales, and No. 64, which deals with Scotland. However, those amendments are weak attempts to achieve the same objectives as new clause 5 achieves in a strong, direct and clear manner.
Having removed the MPC's ability to correct the tendency of areas with too many doctors to get more doctors and of areas with too few doctors to get even fewer, the Government are now trying to reassert it in a


milk-and-water fashion through their amendments. Why are the Government trying to reinvent that ability when the MPC has done a good job in protecting us from the law of inverse care for the past 50 years, since the creation of the national health service, simply because the Government recognise with a late, guilt-ridden feeling that they should try to reinsert some of those powers? Moreover, their attempt to do so is weak and incompetent.
New clause 5 restores the reputation of the Secretary of State for Health, because what he said on Second Reading would come into effect—namely, the MPC's powers would remain in place. Without the new clause, we simply have a weak reinsertion of the MPC's powers to try to correct the tendency. We entirely understand why that tendency happens: there is a natural incentive for doctors to wish to settle down in leafy suburbia where medical problems may not be quite so great, rather than in inner cities, pit villages or Welsh valleys.
We are suspicious that, in removing the power that the MPC has always had to vet vacancies and try to prevent people from being appointed as additional doctors in areas that already have too many doctors, the Government see no problem in having more doctors, appointed to certain areas. Clearly, the work load is lighter in leafy suburbia and in areas with too many doctors. Areas with too few doctors may require a more challenging, missionary zeal on the part of a doctor.
The basic principle of the involvement of the MPC has been to seek to even out the provision of general practices throughout Great Britain. We do not want to see that diluted. We are suspicious that, in diluting the MPC's ability to correct disparities, the Government are complacent about how the law of inverse care might operate in future. The MPC's powers would, by and large, be transferred to health authorities.
However, whereas there are only two MPCs, there are 120 health authorities or health boards that would take on the powers instead. The 100 health authorities in England and five in Wales and the 15 health boards in Scotland each have a duty to look after its own patch. If there is a disparity in the number of doctors in two neighbouring health authorities, the job of the health authority with too many doctors is not to help the authority next door with too few doctors by saying, "We had better not have too many doctors; it would be greedy, given that the health authority next door has too few." The MPC, in contrast, has exactly that role.
There is also a bureaucracy aspect. Why should one attempt to develop expertise in ensuring a reasonably even spread of general practitioners in 120 health authorities or health boards when that area of expertise is currently carried out by two bodies—the England and Wales MPC and the Scottish MPC? Would the health authorities ever attain the level of expertise of the MPC and the ability to recommend whether to prevent a doctor joining a practice because the area is already well served by doctors and there are vacancies that are difficult to fill nearby? It is absurd to transfer that responsibility to 120 bodies from two, and it could result in a huge proliferation of bureaucracy.
The MPC combines that skill and expertise with another skill: the detection of bogus doctors, or doctors who change their name and reappear elsewhere because doubts have been expressed about their competence to practise. The MPC has an extremely good record in

detecting bogus doctors. Why allow health authorities to take on a role that has been satisfactorily conducted by just two bodies for the past two and a half years?
If the Minister wants to help the Secretary of State for Health—perhaps he does not—to restore his reputation for keeping his word, he should accept new clause 5. The Secretary of State said on Second Reading:
The position of the MPC within the existing red book contract remains completely unchanged by the provisions of the Bill."—[Official Report,  11 February 1997; Vol. 290, c. 155.]
The Minister accepted in Committee that, as the Bill stands, the MPC's role changes. Indeed, he boasted about that change and objected to our amendments Nos. 1, 2, 3, 12 and 4 precisely because they attempted to retain the role of the MPC in evening out the supply of general practitioners. He said:
the Secretary of State must lay regulations to the effect that the MPC will retain its current role"—  [Official Report, Standing Committee D, 18 February 1997; c. 179.]
The Minister seemed to think that that was objectionable, although it was exactly what the Secretary of State for Health had promised on Second Reading would be the effect of the Bill on the MPC's duties.
I appeal, if not for Cabinet unity—that would be too much to expect these days—at least for departmental unity between the Secretary of State for Health and the Minister for Health. I ask the Minister to accept that new clause 5 is far superior to the Government amendments. It should be incorporated into the Bill because of the embarrassment that will otherwise be caused to the Secretary of State for Health.

Mr. Malone: Whenever I hear the hon. Member for Cardiff, West (Mr. Morgan) preface a speech by saying that he is about to enter into the philosophy at the heart of the Bill, I know that we are heading for slightly troubled waters. He issued a kindly invitation, but I must point out at the outset that what he said was based on a misunderstanding of the differences between part II arrangements—what happens now in primary care—and what is proposed in the new clause.
The new clause would require health authorities to submit all proposals for personal medical services to the Medical Practices Committee for approval, which is entirely different from the power that the committee currently exercises in deciding how general practitioner manpower, or personpower, should be distributed in respect of part II arrangements.
Health authorities have the responsibility for planning services to meet the needs of their populations. In doing so, they work closely with the profession locally and are able to take full account of local circumstances and needs. As I pointed out in Committee, health authorities are closely involved in matters in which the MPC exercises its current powers, particularly in providing all the necessary information for validation of a doctor's credentials.
I understand the concerns expressed by the profession about the need to ensure an even distribution of the GP workforce, which is why we tabled amendments Nos. 61 and 64, which are the direct result of extensive discussions with the MPC, the profession and others. I referred in Committee to our intention to table such amendments. The discussions resulted in an agreement with the profession to give legislative effect to proposals that


recognise that national distribution of the GP work force must be kept in view by the Secretary of State in considering both pilot and permanent schemes.
We agreed to amend the Bill to provide for the MPC to be consulted on pilots where the number of GPs practising in the relevant health authority area would change, and for the Secretary of State to have regard to the effect on the distribution of GPs nationally in approving pilots, and to ensure that any regulations governing the introduction of permanent arrangements are framed with that in mind.
We amended the Bill in Committee to provide the MPC with a consultation role on pilots. Amendments Nos. 61 and 64 will implement our agreement on permanent arrangements by placing a duty on the Secretary of State to consider whether any proposed permanent scheme is likely to have an adverse effect on the distribution of general practitioners. They will provide the framework for proper consideration of the equity issues to which the hon. Member for Cardiff, West (Mr. Morgan) quite rightly referred.
I concede that we need to bring in measures to deal with GP distribution throughout the country. As I said in Committee, in a slightly different context, we shall take the work forward jointly with the resource allocation group, the Medical Practices Committee, representatives of the profession and health authorities.
Our intention is to form a national view of relative need between health authorities that will inform decisions about the distribution of GPs and contribute to the continuing work on a fairer allocation of financial resources. Such a view will be taken in the context of the new provisions in the Bill. I therefore commend the Government amendments to the House and hope that the Opposition will not press the new clause.

Mr. Morgan: I am grateful to the Minister for his response, but I do not agree with it—partly because he has not even touched on why the Secretary of State said on Second Reading that the position of the Medical Practices Committee would be unaffected by the provisions of the Bill, if he had no intention of implementing that promise.
Does the Minister accept that, since the merger of the family health services and district health authorities on 1 April 1996, some of the intimacy of contact between the health authorities and the primary health care services has been diluted? In the days of family health services authorities, there was always a specific health authority with the specific role of dealing with primary health care. That is no longer the case, so there has already been a loss of the intimate knowledge of the primary health care side.
What about the expertise of the health authorities? Is the Minister defending the measures as deregulatory, in the manner that we have often heard from the Government in the past 18 years? Does he think that it is much better for 105 health authorities and 15 health boards to have a go at evening out the supply of doctors between under-doctored and over-doctored areas? If so, how would he deal with the issue as between different health authorities, each of which has a duty only to look after its own patch? How could the job currently done by only two MPCs, one for England and Wales and one for Scotland, be done better by 120 health authorities or boards?
We believe that the measure is a thoughtless act of deregulation without regard to consequences, but it is most unlikely that it will be implemented as the Government wish because after the change of Government that we and the country now hope for and expect in the next few weeks we can either repeal the section or never make the regulations necessary to put it into effect. I therefore will not press the new clause.

Mr. Chisholm: I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 6

WHISTLEBLOWERS' RIGHTS

'.—(1) Nothing in, or done under, any agreement entered into under the provisions of this Act shall be taken in any proceedings in any court or before any tribunal to deprive a medical practitioner or an employee of a pilot scheme of his undoubted right to raise in whatever manner he sees fit any concerns over the clinical care provided to patients within that scheme.

(2) In the 1977 Act, after section 28C (as inserted by section 21(1)), insert—

Whistleblowers' rights

28CC. Nothing in, or done under any agreement entered into under the provisions of section 28C shall be taken in any proceedings in any court or before any tribunal to deprive a medical practitioner or an individual who is providing personal medical or personal dental services in accordance with section 28C arrangements of his undoubted right to raise in whatever manner he sees fit any concerns over the clinical care provided to patients under those arrangements."

(2) In the 1978 Act, after section 17C (as inserted by section 21(2)), insert—

Whistleblowers' rights

17CC. Nothing in, or done under, any agreement entered into under the provisions of section 17C shall be taken in any proceedings in any court or before any tribunal to deprive a medical practitioner or an individual who is providing personal medical or personal dental services in accordance with section 17C arrangements of his undoubted right to raise in whatever manner he sees fit any concerns over the clinical care provided to patients under those arrangements.".'.—[Ms Jowell.]

Brought up, and read the First time.

Ms Jowell: I beg to move, That the clause be read a Second time.
New clause 6 seeks to safeguard the right of medical practitioners, or those engaged in pilots, to raise issues of concern about their patients through whatever means they consider fit. It would protect the right of general practitioners to raise publicly in the media, rather than with their managers, concerns about the treatment and care of their patients that they feel cannot otherwise be properly addressed, and where the management or other clinical practice in the service has been found to be inadequate. We sought to raise the matter in Committee. Because of the strength of feeling among GPs and other health service professionals, we have brought it back on Report. I hope that even at this late stage the Minister may be persuaded of the importance of safeguarding this freedom.
It is a fundamental protection for health service staff to be able to speak out. It is impossible to describe the terror, the sense of conflict, that doctors and nurses feel before they speak out. We should think of the well documented


scandals with hospitals and other forms of care. I remember especially some of the scandals with long-stay mental hospitals which erupted into public consciousness.

Mr. Thurnham: Although I did not have an opportunity to speak in Committee on the point, I would like the hon. Lady to know that I support her point. It is vital that NHS employees should not feel gagged when important issues arise.

Ms Jowell: I am delighted that the hon. Gentleman has made clear his support for new clause 6.
I had a case several years ago in my constituency where there was evidence of brutality to people suffering from learning difficulties. It was also clear that staff in the hostel concerned knew what was going on, but because of the reign of terror prevailing there they felt unable to raise publicly the concerns that they felt defeated in raising privately. This provision would be part of any good legislation.
It would be much better if we could take it for granted that staff have this power, but we know that they do not. In Committee, I set out in detail the constraints on speaking out that different forms of contract place on staff. Many health service staff are expected to comply with a byzantine procedure. Often it is only after several weeks—a long time—that they can use the course of last resort and go public with their anxieties. Staff may feel unable to raise concerns about the care of their patients with the management in units that are badly managed or where the management is out of touch, or out of sympathy, with the clinical and caring objectives of the service. In those circumstances, the power to act independently in defence of patients' interests is very important.
It is essential that, where bad things are happening to patients, staff are able to take whatever steps they feel necessary to seek a quick remedy. One of the consequences of the Bill will be that following the expected increase in the number of salaried GPs, more GPs will be potentially compromised by being employed rather than being independent contractors. As independent contractors, they have the freedom to speak out. As salaried employees of trusts, they are denied that right.
In the interests of protecting patients, I hope very much that the Minister will support the new clause. If he fails to do so, it will send an extraordinary message to the people of this country—that, despite all that he said in Committee, he supports the gagging of staff, which has the highly undesirable effect of damaging the independent representation of patients. The Government should put the health and safety interests of patients before any other organisational consideration.

Mr. Malone: I will be brief, as I have little to add to what I said in Committee. I do not pretend that this is an easy issue to deal with, and it is extremely important. No one is suggesting that people should be inhibited in any way from raising proper concerns about what is going on in any organisation in which they work within the NHS, and I will show in a moment how we have reinforced that as an obligation on employees. These are not easy issues, but I repeat to the hon. Member for Dulwich (Ms Jowell) that she has overdone it somewhat. There are a range of

examples, some of which she herself has cited, where important cases have been brought to the attention of the proper management—or if not the management, to the attention of Ministers or local health authorities.
We issued guidance to staff in June 1993 which not only stressed that staff concerns should be taken seriously by all managers and should receive full and sympathetic consideration, but made it plain that staff have a duty to raise these concerns in the first place. It is not a question of trying to prevent anyone from doing that, and I hope that there is a culture in the NHS in which people feel that they have a proper responsibility to raise matters of concern with a view to patient confidentiality, fidelity to the employer and, ultimately—if they are professionals—their professional obligation.
The hon. Member for Dulwich mentioned what will happen with salaried GPs. One of the interesting effects of one of her amendments is the strange suggestion that an independent practitioner will have the right to raise problems concerning the clinical care provided to his or her own patients which he or she is providing—a strange exemplification of a whistleblowers' charter. The fact that some may become salaried GPs takes them into the other arrangements and the guidance that we have set out.
I repeat that we take this matter seriously, and we are tackling the issue. We see no need for further legislation on it, and I urge the House not to support the new clause.

Ms Jowell: What is important is that clinicians have an overriding responsibility to their patients. We know that one of the undesirable effects of the Government's reforms has been, in many cases, to compromise institutionally their sense of loyalty. This culminated in the remark of one Roy Lilley a year or so ago, that the principal responsibility of clinicians in the NHS was not to their patients, but to their employer. The suggestion that fidelity to the employer has become the overriding obligation is what causes us great concern.
The Minister has no right to sneer at the comparison between the position of independent contractors and that of salaried GPs. GPs acting as independent contractors are perfectly free to raise concerns about the care that their patients receive in hospitals or other parts of the health service, whereas salaried GPs may feel compromised in raising such concerns. That is why we have tabled the new clause.
The Government's failure to support the new clause speaks volumes and will send out a clear message to staff in hospitals and to workers throughout the health service in this country about the Government's indifference to the protection of patients. Fortunately, for reasons that were stated earlier, that indifference will not persist for much longer and a Labour Government will be able to safeguard the interests of staff and patients in the national health service. In view of that, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 9

PROVISION OF SPECIAL OPHTHALMIC SERVICES UNDER A PILOT SCHEME

'.—(1) This section applies to any pilot scheme under which special ophthalmic services are provided.


(2) An agreement which constitutes, or is one of the agreements which together constitute, a pilot scheme may be made by an authority only with one or more of the following—

(a)an NHS trust;
(b)a person on an ophthalmic list;
(c)an NHS employee or a pilot scheme employee;
(d)a qualifying body;
(e)an individual who is providing special ophthalmic services under that or another pilot scheme.
(3) In this section—
"NHS employee" means an individual who, in connection with the provision of services in the health service, is employed by—

(a)an NHS trust;
(b)a medical practitioner whose name is included in a medical list; or
(c)a medical practitioner who is providing personal medical services in accordance with a pilot scheme;
ophthalmic list" has the same meaning as in section 4A(3) of the National Health Service and Community Care Act 1990 or section I 7AA(3) of the 1978 Act;
pilot scheme employee" means an individual who, in connection with the provision of special ophthalmic in accordance with a pilot scheme is employed by an individual providing those services;
qualifying body" means a company which is limited by shares all of which are legally and beneficially owned by persons falling within paragraph (a), (b), (c) or (e) of subsection (2).'.—[Mr. Simon Hughes.]

Brought up, and read the First time.

Motion made, and Question put, That the clause be read a Second time:—

The House divided: Ayes24, Noes 198.

Division No. 96]
[8.56 pm


AYES


Ashdown, Rt Hon Paddy
Maclennan, Robert


Beggs, Roy
Maddock, Mrs Diana


Beith, Rt Hon A J
Rendel, David


Bruce, Malcolm (Gordon)
Salmond, Alex


Campbell, Menzies (Fife NE)
Skinner, Dennis


Chidgey, David
Smyth, Rev Martin (Belfast S)


Dafis, Cynog
Steel, Rt Hon Sir David


Foster, Don (Bath)
Taylor, Matthew (Truro)


Harvey, Nick
Wallace, James


Jones, Ieuan Wyn (Ynys Môn)
Wigley, Dafydd


Jones, Nigel (Cheltenham)



Kennedy, Charles (Ross C & S)
Tellers for the Ayes:


Kirkwood, Archy
Mr. Peter Thurnham and


Lynne, Ms Liz
Mr. Simon Hughes.


NOES


Ainsworth, Peter (E Surrey)
Bottomley, Peter (Eltham)


Aitken, Rt Hon Jonathan
Bottomley, Rt Hon Mrs Virginia


Alexander, Richard
Bowden, Sir Andrew


Alison, Rt Hon Michael (Selby)
Bowis, John


Allason, Rupert (Torbay)
Brandreth, Gyles


Amess, David
Brazier, Julian


Arbuthnot, James
Bright, Sir Graham


Ashby, David
Brooke, Rt Hon Peter


Aspinwall, Jack
Brown, Michael (Brigg Cl'thorpes)


Atkinson, David (Bour'mth E)
Browning, Mrs Angela


Banks, Robert (Harrogate)
Burns, Simon


Bates, Michael
Burt, Alistair


Batiste, Spencer
Butler, Peter


Bellingham, Henry
Carlisle, John (Luton N)


Biffen, Rt Hon John
Carlisle, Sir Kenneth (Linc'n)


Body, Sir Richard
Carttiss, Michael


Bonsor, Sir Nicholas
Cash, William


Booth, Hartley
Channon, Rt Hon Paul


Boswell, Tim
Churchill, Mr





Clappison, James
Luff, Peter


Clark, Dr Michael (Rochf'd)
Lyell, Rt Hon Sir Nicholas


Coe, Sebastian
MacKay, Andrew


Congdon, David
Maclean, Rt Hon David


Conway, Derek
McLoughlin, Patrick


Coombs, Anthony (Wyre F)
Madel, Sir David


Coombs, Simon (Swindon)
Malone, Gerald


Cope, Rt Hon Sir John
Marland, Paul


Couchman, James
Marshall, John (Hendon S)


Currie, Mrs Edwina
Marshall, Sir Michael (Arundel)


Davis, Rt Hon David (Boothferry)
Martin, David (Portsmouth S)


Devlin, Tim
Merchant, Piers


Dorrell, Rt Hon Stephen
Mitchell, Andrew (Gedling)


Douglas-Hamilton,
Mitchell, Sir David (NW Hants)


Rt Hon Lord James
Moate, Sir Roger


Dover, Den
Monro, Rt Hon Sir Hector


Duncan, Alan
Montgomery, Sir Fergus


Eggar, Rt Hon Tim
Needham, Rt Hon Richard


Elletson, Harold
Neubert, Sir Michael


Evans, Nigel (Ribble V)
Newton, Rt Hon Tony


Evans, Roger (Monmouth)
Nicholls, Patrick


Faber, David
Nicholson, David (Taunton)


Fabricant, Michael
Norris, Steve


Fenner, Dame Peggy
Oppenheim, Phillip


Fishbum, Dudley
Ottaway, Richard


Forman, Nigel
Page, Richard


Forsyth, Rt Hon Michael (Stirling)
Paice, James


Forth, Rt Hon Eric
Patnick, Sir Irvine


Fowler, Rt Hon Sir Norman
Patten, Rt Hon John


Fox, Dr Liam (Woodspring)
Pattie, Rt Hon Sir Geoffrey


Fox, Rt Hon Sir Marcus (Shipley)
Peacock, Mrs Elizabeth


French, Douglas
Pickles, Eric


Fry, Sir Peter
Porter, David


Garel-Jones, Rt Hon Tristan
Powell, William (Corby)


Garnier, Edward
Renton, Rt Hon Tim


Gill, Christopher
Riddick, Graham


Gillan, Mrs Cheryl
Robathan, Andrew


Goodlad, Rt Hon Alastair
Roberts, Rt Hon Sir Wyn


Goodson-Wickes, Dr Charles
Robinson, Mark (Somerton)


Greenway, Harry (Eating N)
Rowe, Andrew


Griffiths, Peter (Portsmouth N)
Scott, Rt Hon Sir Nicholas


Hague, Rt Hon William
Shaw, Sir Giles (Pudsey)


Hamilton, Rt Hon Sir Archibald
Shephard, Rt Hon Mrs Gillian


Hannam, Sir John
Shepherd, Sir Colin (Heref'd)


Hargreaves, Andrew
Skeet, Sir Trevor


Harris, David
Smith, Tim (Beaconsf'ld)


Hawkins, Nick
Speed, Sir Keith


Hawksley, Warren
Spencer, Sir Derek


Hayes, Jerry
Spicer, Sir Jim (W Dorset)


Heathcoat-Amory, Rt Hon David
Spicer, Sir Michael (S Worcs)


Hendry, Charles
Spink, Dr Robert


Higgins, Rt Hon Sir Terence
Spring, Richard


Hogg, Rt Hon Douglas (Grantham)
Squire, Robin (Hornchurch)


Horam, John
Stanley, Rt Hon Sir John


Hordern, Rt Hon Sir Peter
Stern, Michael


Howell, Rt Hon David (Guildf'd)
Stewart, Allan


Howell, Sir Ralph (N Norfolk)
Streeter, Gary


Hughes, Robert G (Harrow W)
Sykes, John


Hunt, Sir John (Ravensb'ne)
Taylor, Ian (Esher)


Hunter, Andrew
Temple-Morris, Peter


Hurd, Rt Hon Douglas
Thomason, Roy


Johnson Smith,
Thompson, Patrick (Norwich N)


Rt Hon Sir Geoffrey
Townsend, Sir Cyril (Bexl'yh'th)


Kellett-Bowman, Dame Elaine
Tracey, Richard


King, Rt Hon Tom
Trend, Michael


Kirkhope, Timothy
Trotter, Neville


Knight, Dame Jill (Edgbaston)
Twinn, Dr Ian


Knox, Sir David
Vaughan, Sir Gerard


Kynoch, George
Viggers, Peter


Lait, Mrs Jacqui
Waldegrave, Rt Hon William


Lawrence, Sir Ivan
Walden, George


Legg, Barry
Waller, Gary


Lennox-Boyd, Sir Mark
Ward, John


Lidington, David
Watts, John


Lilley, Rt Hon Peter
Wells, Bowen


Lloyd, Rt Hon Sir Peter (Fareham)
Wheeler, Rt Hon Sir John






Whittingdale, John
Wood, Timothy


Widdecombe, Rt Hon Miss Ann
Yeo, Tim


Wiggin, Sir Jerry
Young, Rt Hon Sir George


Wilkinson, John
Tellers for the Noes:


Winterton, Mrs Ann (Congleton)
Mr. Matthew Carrington


Winterton, Nicholas (Macclesfld)
and


Wolfson, Mark
Mr. Roger Knapman.

Question accordingly negatived.

Clause 1

PILOT SCHEMES

Amendment made: No. 10, in page 1, line 23, after 'Part I' insert 'or III'.—[Mr. Malone.]

Clause 4

PROPOSALS FOR PILOT SCHEMES

Amendment made: No. 11, in page 4, line 18, leave out from beginning to end of line 24 and insert—

'(2) An authority must prepare and submit such proposals if they are asked to do so by a person—

(a)who wishes to provide piloted services, and
(b)with whom an agreement which constitutes, or is part of, a pilot scheme may be made;
but otherwise they may not do so.'.—[Mr. Malone.]

Clause 5

APPROVAL OF PILOT SCHEMES

Mr. Thurnham: I beg to move amendment No. 1, in page 5, line 7, at end insert—
'(2A) Before approving any pilot scheme, the Secretary of State shall give consideration to the effect that any proposals might have on the ability of the authority concerned to implement arrangements for the joint commissioning (with any social services authority) of personal medical services in combination with community care services.'.
Amendment No. 1 is similar to an amendment that I moved in Committee, although it has been tabled in a somewhat simplified form—which will, I hope, help the Minister to decide to accept it. [interruption.]

Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Member, but there is a buzz of private conversations, which is not acceptable. If hon. Members want to talk, they must leave the Chamber.

Mr. Thurnham: The amendment aims to ensure that, before any pilot scheme is approved, consideration must be given to the authority's ability to implement joint commissioning of primary health and community care.
I am surprised that provision for the establishment of pilot joint commissioning schemes has not been included in the Bill, given that the Government last month announced their desire to move further to break down the organisational boundaries between health and social care through the establishment of pilot primary care joint commissioning projects. The Government said that through the Scottish White Paper entitled "Ready for the Future".
I am disappointed that the amendment that I tabled in Committee was rejected by the Minister. The Bill would be a perfect vehicle for pilot joint commissioning schemes such as those which were specified as an option in the White Paper. The Minister said, however, when I quoted two examples of joint commissioning initiatives, that they were excellent and that the Government wanted to make them more the norm than the exception. I am not sure whether the Minister realised that the two councils to which I referred were Liberal Democrat-controlled. Perhaps he will note that.
The Minister said that joint commissioning is the way forward and a sensible way to provide "seamless care". That being so, I urge the Government to accept the amendment, so that consideration can be given by the Secretary of State, when giving approval to pilots, to the ability of the proposed schemes to take on board joint commissioning with social services. That is especially important in the light of last week's report following the inquiry into the dreadful Martin Mursell tragedy, when a mentally ill patient was released into the community. He murdered his stepfather and seriously assaulted his mother.
The chairman of the inquiry listed what he called the "appalling lack of co-ordination" between health and social services. I want to be sure that nothing in this highly commendable primary care Bill should jeopardise the future of joint commissioning initiatives, especially as the Government describe joint commissioning as the way forward for primary care.
Joint commissioning is necessary given the introduction of community care reforms in 1993. Boundaries of primary and social care have become increasingly blurred, especially where the care of the elderly, the disabled and the mentally ill is involved. Those who previously would have been looked after in long-term hospitals are now living more and more in the community. The process is to be welcomed, but I would not presume to say that it is at all easy.
The gaps and loopholes that we have created are becoming increasingly evident. For example, the practice of bed blocking is one appalling instance of the lack of a coherent framework for health and social care. It has become a particular problem of late in the North Manchester Healthcare NHS trust area. At the launch of the Green Paper on mental health last month, the Secretary of State acknowledged the glaring gaps in the care of mentally ill people because of the failure to ensure interdepartmental co-operation.
The Green Paper specifically examines the need for funding mechanisms to be modified to support more effective partnerships between health and local authorities. If the amendment were agreed to, it would not preclude any of the options set out in the Green Paper. There is no benefit in waiting, as suggested by the Minister. Why wait? Why not allow one option to be implemented now?
There is an overriding consensus in support of joint commissioning. The British Medical Association and many other bodies have made that clear. Mr. Philip Hunt, the director of the National Association of Health Authorities and Trusts, said:
We must remove all the obstacles to joint commissioning.


Denise Platt of the Association of Metropolitan Authorities said:
We call on the government to work with us to develop joint commissioning as a reality for the future.
Jennifer Bernard of the Association of Directors of Social Services said
We all want the outcomes for users and carers to be the best possible. Closer working is the best way forward.
The director of the Sainsbury Centre for Mental Health said:
Joint commissioning is happening in some parts of the country, but this is usually because of the determination of a handful of dedicated people who want to make it work. What's needed is a proper statutory framework for joint commissioning which will create a single funding stream.
At a recent seminar organised by the BMA on long-term care, 18 different organisations drew attention to the need for pilot schemes, which would allow shared budgets and joint commissioning.
One of Bolton's top doctors on geriatrics, Dr. Arup Banerjee, the medical director of Bolton Hospitals NHS trust and president of the British Geriatrics Society, said only recently:
health services have been failing our older generations through inadequate and sub-standard medical and social care.
He drew attention to the gap in provision between hospitalisation and care by untrained staff. GPs are in an excellent position to help, through joint commissioning schemes with social services departments. The BMA itself has said that, all too often, GPs experience a nightmare with community care. I should like to be able to ensure that the Bill will take community care into account as a vital factor in the granting of approval to pilot schemes.
9.15 pm
The current legal framework for joint commissioning and interdepartmental co-operation is contradictory and confusing, not only to the public but to GPs and social workers. Under the National Health Service Act 1977, funds can be transferred from health authorities to local authorities, but it is illegal to transfer funds from local authorities to health authorities. At present, the only way around that is via schedule 113 of the Local Government Act 1972, which permits local authorities to have access to the services of the staff of health authorities or trusts.
The Department of Health's own guidelines—in its practical guidance on joint commissioning, published in 1995—state that expert legal advice should determine how joint commissioning projects are established. That is clearly absurd. The needs of patients, rather than inconsistent legal technicalities to be dealt with by expert legal advisers, should determine the provision of services.
The Minister may recall that I have given two examples, relating to Sutton and Bexley. I feel that the health authorities and social services departments of both councils should be commended for their many initiatives. They have worked together to try to secure more and better services for users and carers with the same, or fewer, resources. Sutton is one of the authorities that have approached joint commissioning with enthusiasm and vigour, achieving enormous success in mental health provision. It has helped those with learning difficulties,

and integrated the care of older people and those receiving continuous NHS care in the community. The King's Fund has adopted Sutton as a pilot site for a national joint commissioning research initiative involving joint primary care. It is also working closely with the south-west London total purchasing pilot to develop more co-ordinated services for older people.
Bexley is another authority that has established useful precedents of co-operation with the health authority, and a joint strategy for primary care. Those are just two of the many local authorities and social services departments that would support moves to rationalise their options in joining GPs in the provision of comprehensive primary health and social care.
As I said earlier, I was delighted by the publication of the Scottish White Paper "Ready for the Future", which established pilot joint commissioning projects in Scotland. I entirely agree with the Government's arguments in that paper about the need for such projects as a way to achieve a seamless service that is based on the needs of the individual rather than the services of the agency first contacted. The paper refers to the
repeated pleas from those who work within the Service for greater flexibility… across the health/social care interface",
and goes on to say:
Care in the Community is an important policy which complements the development of Primary Care… It requires co-operation at the strategic, operational and service provision levels between health, social work and housing interests and also requires a shift in resources and provision from long-term hospital care to community care.
In paragraph 95, which deals with breaking down barriers between health and social care, the paper states:
The Government now judges that it would be desirable to move further to break down the organisational boundaries between health and social care, as these can be confusing to patients and can hinder the co-ordinated provision of care. Either the GP or the Social Work Department can be the key to the services needed, and in consequence there can be confusion and uncertainty about who to turn to in particular cases. This is especially so in more complex cases where the need for assistance is greatest. This confusion is not confined to the public. It occurs amongst those responsible for providing the services. It follows that one of the main ways of making the system more responsive to public needs is to help to remove some of the confusion about existing organisational arrangements.
Those are the Government's own words.
The White Paper goes on to describe the initiative of six pilot schemes to promote local integration of primary health and social care through the devolution of funding and accountability, and team working across all the professional groups involved in primary care. Health boards, trusts, GPs and local authorities in Scotland will be invited to submit proposals.
The benefits of joint commissioning are many, and will continue to become more important as the impact of demographic changes and community care policies leads to more people needing care in community settings. Joint commissioning would mean a seamless service and solve the problems of inter-agency arguments, cost shunting and loopholes in the provision of care to some of the most vulnerable people. It would give maximum value for money, reduce duplication and provide complementary services. People would get a higher-quality service, which would combine expertise and ideas. It would also give a better general picture of need, and facilitate planning for future needs.
In the light of their arguments, the Government should include the amendment, to ensure that the growing problem of gaps in provision between health and social care are


taken into account when approving pilot schemes. The Bill gives an opportunity to make progress on the development of a seamless service of primary care.
When the Minister replied to these same points in Committee, he said,
it seems sensible to consider the responses to the consultation on the Green Paper before progressing with any legislation."—[Official Report. Standing Committee D,  27 February 1997; c. 207.1
I can see nothing whatever to be gained by waiting. I can see no reason why we cannot proceed. That does not preclude any other options that were in the Green Paper. There is nothing to be lost by proceeding. I urge the Minister to accept the amendment.

Mr. Malone: The hon. Member for Bolton, North-East (Mr. Thornham) raises an important issue. He gave examples of a number of sensible objectives on which we are at one, but I hope that I can persuade him that his amendment is not necessary. I draw his attention to clause 4, which requires health authorities to comply with any directions given to them by the Secretary of State about the extent to which, and the manner in which, they are to consult on proposals. It also requires health authorities to make a recommendation to the Secretary of State when they submit proposals for a pilot scheme to him. The Secretary of State will be able to direct them on the matters that they must take account of when they submit their proposal.
The hon. Gentleman's objectives can already be achieved through the exercise of the direction-making powers as matters proceed. I can reassure him-I hope that he will find this helpful-that we want health authorities to consult on proposals locally, including, where appropriate, social services departments. In the recommendations that health authorities make, we will want them to set out the impact that the proposals would have on local services. The hon. Gentleman wishes to achieve that through his amendment.
We will want assurances that the new arrangements will lead to improved local services and not just skew services in one particular direction at the expense of other patient services. That is an important criterion, to which the hon. Gentleman referred, and it is a matter on which we have made some progress. In 1995, we published practical guidance on joint commissioning. There will be a development programme, including a series of locality workshops, to encourage and enable authorities to develop their joint commissioning further in taking this work forward.
A second strand of the development project is the establishment of a number of locality sites to explore the involvement of GPs and primary health care teams in joint commissioning. I hope that I have been able to reassure the hon. Gentleman that not only is this something we expect to happen, there is a programme of work to ensure that it will happen. The provisions in the Bill are sufficient to ensure that. I ask the hon. Gentleman, having considered that, to withdraw his amendment.

Mr. Thurnham: I am sorry that the Government do not feel able to accept the amendment, and hope that if we cannot make further progress in this Parliament there might be an opportunity to make rapid progress in the next. I shall not press the matter further now. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Thurnham: I beg to move amendment No. 2, in page 5, line 12, after 'practitioners', insert 'or dental practitioners'.

Mr. Deputy Speaker (Mr. Michael Morris): With this it will be convenient to discuss the following amendments: No. 3, in page 5, line 16, after 'practitioners', insert 'and dental practitioners'.

No. 4, in page 5, line 18, after 'practitioners', insert 'and dental practitioners'.

No. 5, in page 5, line 20, after 'practitioners', insert 'and dental practitioners'.

No. 6, in page 5, line 23, after 'consult', insert '(as appropriate)'.

No. 7, in page 5, line 23, leave out '(as appropriate)'.

No. 8, in page 5, line 29, after 'services', insert; and
dental practitioner" means a dental practitioner whose name is included in a dental list (within the meaning of section 3(3) above).'.

Mr. Thurnham: The Secretary of State must have regard to the distribution of services when he gives approval to pilot schemes. These amendments correct what I can only think was an oversight on the part of the Government. It must have been an error that dentists were not included in the Bill.
Clause 1(1)(b) specifically calls for dental services to be provided by pilot schemes in the same way as medical services.
Clause 3 details the nature of dental services that can be provided under a pilot scheme in the same way as clause 2 details medical services.
Clause 5, which establishes the factors on which approval of pilot schemes should depend and the obligation of the Secretary of State to have regard to their effect on the distribution of services and so on suddenly seems to forget about dental services and talks only of general practitioners. The distribution of dental practitioners has been entirely forgotten.
There are enormous variations in dental health between different parts of the country. The paper, "An Oral Health Strategy for England" contains a map from which it is clear that the north-west region is the worst for dental health. The bottom 12 areas are all in the north-west. The tables published by the British Association for the Study of Community Dentistry show, sadly, that Bolton, of which my constituency is a part, is at the bottom of the national league table, along with north and central Manchester.
Dentists in my constituency, and the dental consultants to the Wigan and Bolton health authority, are extremely concerned about those figures. I share their concern that the Bill should play its full part in raising standards of dental health. It is vital that the distribution of dentists should be included in the Bill, as is the distribution of GPs. Dentists in my constituency and the dental consultants to the Wigan and Bolton health authority have pressed me on what the Bill will do to improve dental health in the north-west, which is bad and, in areas such as Bolton, deteriorating.
The single biggest issue for dentists who are concerned about primary services is fluoridation. Legislation is weak in that area. I was disappointed recently to receive a letter from the Minister in which he said that it should be a matter for the courts if a water authority does not go ahead with fluoridation when it has been requested to do so by the health authority. That fills the health authority with dismay.
I received a copy of a letter, dated 13 February, from North West Water to Wigan and Bolton health authority, in which the company made it clear that it will not go in for fluoridation unless Parliament decides that it should. It is wrong for the Minister to say that these matters should be taken up in the courts. We need much stronger legislation to ensure that fluoridation is introduced. The figures show that lack of good dental health correlates to deprivation. The best way to solve that problem, and hence provide better primary care services in the north-west, is to introduce strong legislation on fluoridation.
I quoted figures in Committee to show that the situation in Bolton is deteriorating. The number of five-year-olds who are free from dental decay has decreased from 41 per cent. in 1988 to only 26 per cent. in 1994. There is no chance of our achieving the Government's target of more than 70 per cent. of five-year-old children free from dental decay by 2003 unless much stronger measures to deal with the problem are taken.
The Minister may be aware that I am carrying out my own pilot scheme in my area—my own initiative—to help improve primary care services. I carry in my pocket a child's toothbrush, courtesy of sponsorship by Colgate and North West Water. I have already visited half the primary schools in my constituency to discuss with the children how they could better clean their teeth. I hope that the Minister will tell us whether pilot schemes could be introduced in the north-west to deal with the problem of deteriorating decay, so that dental practitioners and the dental consultants to the Wigan and Bolton health authority can have confidence that the Bill will help to address one of the most serious health deficiencies in the north- west.

Mr. Malone: I remind the hon. Gentleman that the distribution of the dental work force has an entirely different history from that of general practitioners. The statutory system established in 1947–48 did not include dentistry. Dentists have differing commitments to the NHS, and the distribution of dentists is often not the whole story, because they are free either to participate in NHS services or provide private services. If we were to impose a national distribution service of dental health care, I am not sure that it would work.
We want to use the dental work force as it is spread around the country in a more innovative way to deal with problems of oral health care. I hope that that deals with the hon. Gentleman's point and gives him the reassurance that he was seeking. What is important is how dentists spend their time, not how many of them there are in a particular area. The purpose of the Bill is to ensure that dentists can be targeted by contracts to meet local priorities in the most effective way.
The hon. Member described an oral health scheme in which he is actively participating. A scheme where it can be demonstrated that there will be an improvement in

local oral health care over a segment of the population. rather than one in which people carry toothbrushes around in their pockets, is precisely what the changes in the Bill presage. That is what we said in our Green Paper, what we have said since, and what the Bill will bring about.
The amendments would give unnecessary and inappropriate weight to the number of dentists in a given area in the assessment process for pilot proposals. The information would not even enable us to influence the overall number of dentists providing NHS services. That must be done through contract. The Bill will provide the ability to target improved oral health care on areas of population that are deprived of it just now. I hope that the hon. Member will understand that that is the proper purpose of the legislation, and that his amendment is effectively unnecessary.

Mr. Thurnham: I am disappointed that the Minister is not able to accept the amendments. I feel that they would improve the Bill. If we had more time, we could debate the matter further, but I shall not press the matter now.
The issue is of serious concern. There is a high concentration of poor dental health in the north-west. According to Mr. Colin Dean of the Bolton Dental Company, Bolton has the highest concentration of dental manufacturing businesses in the world, which indicates the extent of the problem. I hope that the Minister will be able to address the issues that I have raised in the remaining days of this Parliament, and that they will be fully addressed in the next Parliament. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10

RELATIONSHIP BETWEEN THIS PART AND THE 1978 Act

Amendments made: No. 37, in page 7, line 8, after second 'by' insert 'regulations made or'.

No. 12, in page 7, line 9, leave out 'Part I of'.—[Mr. Malone.]

Clause 11

MEDICAL PRACTITIONERS TO BE SUITABLY EXPERIENCED

Amendment made: No. 59, in page 7, line 13, at end insert—

'() Subsection (1) does not prevent the performance of personal medical services by—

(a) a person who is acting in the course of acquiring the experience prescribed by regulations made under section 32 of the 1977 Act or section 22 of the 1978 Act;
(b) a person who is provisionally registered under section 15 or 21 of the Medical Act 1983, acting in the course of his employment in a resident medical capacity in an approved medical practice (within the meaning of section 11(4) of that Act); or
(c)such other category of person as may be prescribed:.— [Mr. Malone.]

Clause 21

PROVISION OF PERSONAL MEDICAL OR DENTAL SERVICES

Amendments made: No. 13, in page 13, line 17, leave out 'and section 28E'.

No. 14, in page 16, line 8, leave out 'and section 17E'.—[Mr. McLoughlin.]

Clause 22

SUPPLEMENTARY REGULATIONS

Amendments made: No. 60, in page 18, line 16, leave out from beginning to end of line 18 and insert—
'medical practitioners performing personal medical services, and dental practitioners performing personal dental services, in accordance with section 28C arrangements.
In paragraph (b)"practitioner" does not include a practitioner who is undergoing training of a prescribed description.'.

No. 61, in page 19, line 24, at end insert—


'() The Secretary of State must—

(a) consider whether section 28C arrangements are likely to have an adverse effect on the distribution of medical practitioners providing general medical services or performing personal medical services in England or in Wales;
(b) if he thinks that the arrangements are likely to have that effect, consider whether it is necessary to include in the regulations provisions designed to secure that, so far as is possible, the arrangements do not have that effect; and
(c) if he thinks that it is necessary, include such provisions in the regulations.'.

No. 62, in page 19, line 24, at end insert—
'() Regulations which impose conditions on persons performing personal medical services or persons performing personal dental services (whether made by virtue of subsection (2)(b) or otherwise) may, in particular, include provision of a kind that may be made by regulations under section 32.'.

No. 15, in page 19, line 31, after 'arrangements' insert
'or corresponding services under section 17C of the National Health Service (Scotland) Act 1978'.

No. 63, in page 20, line 18, leave out from beginning to end of line 20 and insert—
'medical practitioners performing personal medical services, and dental practitioners performing personal dental services, in accordance with section l7C arrangements.
In paragraph (b) "practitioner" does not include a practitioner who is undergoing training of a prescribed description.'.

No. 64, in page 21, line 27, at end insert—


'() The Secretary of State must—

(a) consider whether section 17C arrangements are likely to have an adverse effect on the distribution of medical practitioners providing general medical services or performing personal medical services in Scotland;
(b) if he thinks that the arrangements are likely to have that effect, consider whether it is necessary to include in the regulations provisions designed to secure that, so far as is possible, the arrangements do not have that effect; and
(c) if he thinks that it is necessary, include such provisions in the regulations.'.

No. 65, in page 21, line 27, at end insert—
'() Regulations which impose conditions on persons performing personal medical services or persons performing personal dental services (whether made by virtue of subsection (2)(b) or otherwise) may, in particular, include provision of a kind that may be made by regulations under section 22.'.

No. 16, in page 21, line 34, after 'arrangements' insert
'or corresponding services under section 28C of the National Health Service Act 1977'.—[Mr. McLoughlin.]

Clause 28

TERMS AND CONDITIONS, ETC.

Amendments made: No. 17, in page 29, line 28, leave out '63(2)(a)' and insert '63(2A)(a)'.

No. 18, in page 30, line 17, leave out '63(2)(a)' and insert '63(2A)(a)'.—[Mr. McLoughlin.]

Clause 30

PROVISION OF CERTAIN SERVICES UNDER NHS CONTRACTS

Amendments made: No. 19, in page 31, line 20, leave out '63(2)(a)' and insert '63(2A)(a)'.

No. 20. in page 31, line 36, leave out from second 'body' to end of line 37 and insert
'which is a health service body for the purposes of section 17A'.

No. 21, in page 32, line 6, leave out '63(2)(a)' and insert '63(2A)(a)'.—[Mr. McLoughlin.]

Clause 37

REGULATIONS AND DIRECTIONS

Amendments made: No. 38, in page 39, line 28, after 'under' insert 'or by virtue of'.

No. 39, in page 39, line 31, at end insert—
'() Subsection (2) applies in relation to any power of the Secretary of State under or by virtue of this Act to give directions as it applies in relation to any power of his to make regulations.'.[Mr. McLoughlin.]

Clause 38

INTERPRETATION

Amendments made: No. 22, in page 39, line 38, at end insert—
' "authority" has the meaning given by section 1(8);'.
No. 36, in page 39, line 38, at end insert—
' "medical list" has the meaning given by section 2(5);'.
No. 66, in page 39, line 38, at end insert—
' "health service" means the health service in England and Wales and the health service in Scotland;".'—[Mr. McLoughlin.]

Clause 39

SHORT TITLE, COMMENCEMENT AND EXTENT, ETC.

Amendments made: No. 40, in page 40, line 18, after '(9)' insert 'and (13) and (14)'.

No. 41, in page 40, line 28, after 'by' insert 'or under'.

No. 42, in page 40, line 35, leave out 'and (8)' and insert ', (8) and (13)'.

No. 43, in page 40, line 41, at end insert—


'(13) The Secretary of State may by order make such amendments or repeals of any enactment passed before, or in the same Session as, this Act as appear to him necessary or expedient in consequence of any provision of this Act.


(14) An order under subsection (13)—

(a) may contain such supplemental, incidental, consequential or transitional provisions and savings as the Secretary of State considers appropriate; and
(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.—[Mr. McLoughlin.]

Schedule 2

AMENDMENTS

Amendments made:: No. 67, in page 43, line 29, leave out 'Section 59 of.

No. 68, in page 43, line 31, leave out 'subsection' and insert 'section 59'.

No. 69, in page 43, line 34, leave out 'subsection' and insert 'section 59'.

No. 70, in page 43, line 39, at end insert—
'() After section 63(2)(b) insert—
(ba) the provision or performance of a service in accordance with arrangements made under section 28C of the 1977 Act or section 17C of the National Health Service (Scotland) Act 1978 and an activity involved in or connected with the provision or performance of such a service".'.
No. 71, in page 44, line 7, at end insert—
'() After subsection (1) insert—
"(1ZA) It is the duty of each Health Authority, in accordance with regulations, to perform such functions in relation to section 28C arrangements as may be prescribed.
(1ZB) Regulations under subsection (1ZA) may, in particular—
(a) prescribe functions in relation to training;
(b) provide for appeals to the Secretary of State or a prescribed body in relation to functions prescribed by the regulations.".'.
No. 44, in page 44, line 27, leave out from 'means' to end of line 31 and insert '—
(a) in relation to a medical practitioner who practises otherwise than in partnership, an individual who is on that practitioner's list of patients (or, if that practitioner and one or more other medical practitioners together have a single list of patients in connection with section 28C arrangements, an individual who is on that single list);
(b) in relation to a medical practitioner who is one of two or more practitioners who practise in partnership with each other, an individual who is on the list of patients of any of those practitioners (or, if any of those practitioners together have a single list of patients in connection with section 28C arrangements, an individual who is on that single list)." '.
No. 23, in page 44, line 31, at end insert—
'.—(1) Section 26 is amended as follows.
(2) For subsection (2) substitute—
"(2) The Secretary of State may supply or make available to persons—
(a) providing general medical services, general dental services, general ophthalmic services or pharmaceutical services, or
(b) providing, in accordance with section 28C arrangements, personal medical services, personal dental services or other services of a kind that may be provided under this Part,
such goods, materials or other facilities as may be prescribed."
(3) In subsection (4), after the words "pharmaceutical services" at the end of paragraph (a) insert—

"(aa) persons performing, in accordance with section 28C arrangements, personal medical services, personal dental services or other services of a kind that may be provided under this Part,".'.
No. 24, in page 44, line 31, at end insert—
'. After section 28G insert—
"Immunisation
28H. Where the Secretary of State arranges with medical practitioners for the vaccination or immunisation of persons against disease, he shall so far as reasonably practicable give every person providing, and every medical practitioner performing, personal medical services in accordance with section 28C arrangements an opportunity to participate in the arrangements for vaccination or immunisation.".'.
No. 25, in page 44, line 31, at end insert—
'. After section 28H insert—
"Use of accommodation
28I. If the Secretary of State considers that any accommodation provided by him by virtue of this Act is suitable for use in connection with the provision of personal medical services or personal dental services in accordance with section 28C arrangements, he may make the accommodation available on such terms as he thinks fit to persons providing those services.".'.
No. 45, in page 45, line 25, at end insert—
'. In section 85(1), references to functions conferred or imposed by or under the 1977 Act are to he construed as including references to functions conferred or imposed in relation to pilot schemes by or under this Act; and references to regulations and directions are accordingly to be construed as including regulations or directions under this Act.'.
No. 46, in page 45, line 25, at end insert—
'. In section 86, the reference to a function conferred by virtue of the 1977 Act is to be construed as including a reference to a function conferred in relation to pilot schemes by virtue of this Act.'.
No. 26, in page 45, line 32, at end insert—
'. In section 103(1)(a) after "Act" insert "or in accordance with section 28C arrangements".'.
No. 27, in page 45, line 32, at end insert—
'. In section 105(2)(a) after "examined" insert "or as part of his duty to perform personal medical services for that person in accordance with section 28C arrangements".
No. 47, in page 45, line 32, at end insert—
'. In section 126(3), after "under" insert "or by virtue of'.'.
No. 72, in page 45, line 32, at end insert—
'. In section 102(1)(a)(iii) and (2)(b), after "section 32 above" insert "or by regulations which make provision in relation to section 28C arrangements of a kind that may be made by regulations under section 32 above".'.
No. 28, in page 47, line 45, at end insert—
'.In section 15(1)(a)—
(a) after "persons" insert "—

(i)"; and

(b) after "Part II" insert "; or

(ii) providing, in accordance with section 17C arrangements, personal medical services, personal dental services or other services of a kind that may be provided under this Part or Part III,".'.
No. 29, in page 47, line 45, at end insert—
'. In section 17A(2), at the end insert "and in this Act "health service body" means any of those persons or bodies".'.
No. 30, in page 47, line 45, at end insert—
'. After section 17G insert—

Immunisation

17H. Where the Secretary of State arranges with medical practitioners for the vaccination or immunisation of persons against any disease, he shall so far as reasonably practicable give every person providing, and every medical practitioner performing, personal medical services in accordance with section 17C arrangements an opportunity to participate in the arrangements for vaccination or immunisation.".'.
No. 31, in page 47, line 45, at end insert—
'. After section 17H insert—

Use of accommodation

17I. If the Secretary of State considers that any accommodation provided by him by virtue of this Act is suitable for use in connection with the provision of personal medical services or personal dental services in accordance with section 17C arrangements, he may make the accommodation available on such terms as he thinks fit to persons providing those services.".'.

No. 32, in page 48, line 15, after '17C' insert 'arrangements'.

No. 48, in page 48, line 16, leave out from 'means' to end of line 20 and insert '—
(a) in relation to a medical practitioner who practises otherwise than in partnership, an individual who is on that practitioner's list of patients (or, if that practitioner and one or more other medical practitioners together have a single list of patients in connection with section 17C arrangements, an individual who is on that single list);
(b) in relation to a medical practitioner who is one of two or more practitioners who practise in partnership with each other, an individual who is on the list of patients of any of those practitioners (or, if any of those practitioners together have a single list of patients in connection with section 17C arrangements, an individual who is on that single list)." '.

No. 49, in page 49, line 16, at end insert—
'. In section 77(1), references to functions conferred or imposed by or under the 1978 Act are to be construed as including references to functions conferred or imposed in relation to pilot schemes by or under this Act; and references to regulations, schemes, proposals and directions are accordingly to be construed as including regulations, schemes, proposals or directions under this Act.'.

No. 50, in page 49, line 16, at end insert—
'. In section 78, the reference to a function conferred by or under the 1978 Act is to be construed as including a reference to a function conferred in relation to pilot schemes by or under this Act.'.

No. 51, in page 49, line 38, leave out from "practice patient"' to end of line 42 and insert
', in relation to a recognised fund-holding practice, means an individual who is on the list of patients of any of the members of the practice (or, if any of those members together have a single list of patients in connection with section 17C arrangements, an individual who is on that single list)." '.

No. 73, in page 49, line 42, at end insert—
'.—(1) Section 87D is amended as follows.

(2) In subsection (1), for "subsection (2)" substitute "subsections (2) and (8)".
(3) In subsection (3)—
(a) in paragraph (a), after "who" insert "is on the medical list of a Health Board and"; and
(b) for paragraph (b) substitute—
"(b) in the case of two or more medical practitioners who practise in partnership with each other, each medical practitioner who is on the medical list of a Health Board;".
(4) After subsection (7) insert—

(8) This section does not apply in relation to the performance or provision of personal medical services in accordance with section 17C arrangements.".'.

No. 74, in page 49, line 42, at end insert—
'. In section 88(1)(d) and (2)(e), after "section 22" insert "or by regulations which make provision in relation to section 17C arrangements of a kind that may be made by regulations under section 22".'.

No. 33, in page 49, line 44, leave out 'within the meaning of and insert 'specified in'.

No. 75, in page 51, line 46, at end insert—

'The Medical Act 1983 (c.54)

.(—(1) The Medical Act 1983 is amended as follows.

(2) In section 11(4), in the definition of "approved", for ", in relation to a hospital or institution," substitute "(except in subsection (5))".
(3) In section 13—

(a) in subsection (1), for "approved hospital or approved institution" substitute "approved hospital, approved institution or approved medical practice";
(b) in subsection (2), for "hospital or institution" substitute "hospital, institution or medical practice";
(c) in subsection (3)(a), for "an approved hospital or an approved institution" substitute "an approved hospital, an approved institution or an approved medical practice".
(4) In section 15(3), for "approved hospitals or approved institutions" substitute "approved hospitals, approved institutions or approved medical practices".
(5) In section 21(3), for "approved hospitals or approved institutions" substitute "approved hospitals, approved institutions or approved medical practices".'.

No. 52, in page 53, line 23, leave out from "practice patient"' to end of line 27 and insert
', in relation to a recognised fund-holding practice, means an individual who is on the list of patients of any of the members of the practice (or, if any of those members together have a single list of patients in connection with arrangements made under section 28C of the principal Act, an individual who is on that single list)." '.

No. 34, in page 53, line 27, at end insert—


'() In section 62(7), after paragraph (a)(i) in the definition of "services" insert—
"(ia) arrangements made under section 28C of that Act;".'.

No. 76, in page 53, line 27, at end insert—

'() In section 18(1) for "subsection (2)" substitute "subsections (2) and (8)".
() In section 18(3)—
(a) in paragraph (a), after "who" insert "is on the medical list of a Health Authority and"; and
(b) for paragraph (b) substitute—
"(b) in the case of two or more medical practitioners who practise in partnership with each other, each medical practitioner who is on the medical list of a Health Authority;".

() After section 18(7) insert—
"(8) This section does not apply in relation to the performance or provision of personal medical services in accordance with arrangements made under section 28C of the principal Act.".'.

No. 35, in page 54, line 40, after 'Service' insert '(Scotland)'.—[Mr. McLoughlin.]

Title

NATIONAL HEALTH SERVICE (PRIMARY CARE)

Amendments made: No. 53, in title, line 3, leave out 'ophthalmic,'.

No. 54, in title, line 6, after 'Authorities' insert
'and Health Boards; to make provision about ophthalmic services'.—[Mr. McLoughlin.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Malone.]

Ms Jowell: We have had a full debate both on Report and in Committee. As my hon. Friends have made clear, in many respects we support the Bill, but, having completed its consideration in Committee and on Report, there are still aspects of the Bill that leave with us grave concern.
We believe that the Bill still creates the possibility for commercialisation of primary care—the presence, as the British Medical Association put it, of the third party in the consulting room, compromising the overriding responsibility of general practitioners to their patients, regardless of other considerations. We believe that the Bill still represents a leap in the dark. We do not know how many pilots are likely to develop as a result of the Bill. As it stands, they will be unevaluated, without systematic parliamentary scrutiny through regular annual reports, and without adequate local consultation with local medical committees.
We believe that the strategic role of the medical practices committee has been compromised and we are not satisfied that there are adequate safeguards for patients. There remains the possibility of GPs and staff employed by pilots being gagged and losing their present freedom to speak up for patients when they are concerned about aspects of their clinical care.
At the beginning of the Committee stage, we were promised not only that we would hear the Government's case put by the Minister, which it certainly was, but that Conservative Members would speak up at relevant points in Committee and on Report. However, apart from the odd intervention and some sedentary interventions, they remained silent. It was a case of Malone alone.
We hope that the Bill's provisions will be implemented by a Labour Government, who will replace the drive to commercialise with a drive to restore the national health service and primary care as a public service. We want to put the fragments of the national health service back together again, and consequently end the lottery that has been created by the internal market. We want a national health service that provides proper protection for patients and for staff by ending the gagging that has again been imposed by trusts which are competing under the internal market.
Perhaps most of all, we want an opportunity to restore fairness between patients. Primary care is an essential part of the service that all of us most often use as patients. We are usually not patients in hospital but patients of our general practitioner or of another part of the primary care system. The overriding obligation within that context is

to establish fairness between patients, which is the essence of our argument against fundholding. The fundholding system has deliberately been established, not to treat patients on the basis of their clinical need, but to allow patients access to treatment on the basis of their GP's status. We do not think that that is acceptable, because it drives at the very heart of the NHS's purpose.
The Government cannot understand that message, which is why the NHS will be at the centre of a general election campaign that Opposition Members believe will result in the Government being driven from office, and not a moment too soon.

Mr. William Cash: I shall speak very briefly indeed. I thoroughly endorse the entire concept of competition that runs through the Bill's provisions. However, I should like to mention briefly the problem of rural dispensing surgeries, on which I have been campaigning for some time. Unfortunately, under current regulations—some of which come under section 43 of the National Health Service Act 1977—some of which are being amended by the Bill, provision of existing services are prescribed for a one-mile radius, thereby creating a monopoly. I believe that that provision creates an uncompetitive situation and that it should be removed.
I know that the Minister is closely involved in current discussions between the British Medical Association and the pharmaceutical industry, and that he is doing his best to knock their heads together in an attempt to reach a sensible solution, which is necessary. I believe very strongly that rural dispensing surgeries are useful and essential for patients and consumers. I should like to have it on the record that the Bill makes no provisions that could in any way prejudice the continuation of rural dispensing surgeries.

Mr. Bayley: It is in the nature of our debates to emphasise our differences, because we debate the parts of a Bill on which we disagree. In this debate on the Bill's Third Reading, I should like to say that I support its basic principle, which holds out the prospects of innovation, of new service patterns and—should Ministers desire to do so—of targeting resources on areas with considerable unmet health care need, thereby tackling inequalities. Although the current Government may not implement the Bill to achieve those objectives, I am sure that a Labour Government would.
My single greatest reservation on the Bill is the extent to which it leaves open the door to commercialising services. That is a serious flaw in the Bill but I anticipate that in a few weeks' time the current Minister for Health will be on this side of the House and my hon. Friend the Member for Dulwich (Ms Jowell) will be at the Government Dispatch Box. If that happens after the general election—[Interruption.]

Mr. Deputy Speaker: Order. Third Reading speeches should be confined purely to the content of the Bill and should not involve speculation.

Mr. Bayley: I am glad that I have been called to order. I look forward to a statement from a Minister that the commercialisation of primary health care services will not take place. I feel that is likely to happen in a few weeks' time when my hon. Friend the Member for Dulwich is in a position to do so.

Mr. Thurnham: I broadly support the aims of the Bill and I should like it to reach the statute book as soon as possible. It gives medical and dental practitioners the opportunity to be innovative and co-operative, so I hope that it will improve health services throughout the country.
I was amazed by the Labour party's failure to support free eye tests for the over-60s as they have in the past. It would be a self-financing measure that would improve the quality of life of over 60-year-olds and reduce the need for expensive health treatment by attending to matters at an early stage.

Mr. Bayley: When the House voted on the matter, did the hon. Gentleman vote against the Government's proposal to introduce charges for eye tests?

Mr. Thurnham: The hon. Gentleman was kind enough to support my speech in Committee. As I said at the time, I gave the Government the benefit of the doubt. I am now thoroughly persuaded that eye tests should be free, and I hope that the Labour party has not made a U-turn on the matter, as the arguments to support that are so strong.
I hope that the regional differences will be addressed. As I mentioned to the Minister, I celebrated my 5,000 days as a Member of Parliament by distributing 5,000 toothbrushes and tubes of toothpaste to five-year-olds in my constituency. If the Minister has time to visit my constituency, I hope that he will join me in showing five-year-olds how to clean their teeth with those toothbrushes. I support the Bill and look forward to it reaching the statute book.

Mr. Simon Hughes: I shall be brief. As I said on Second Reading, it is in essence a good Bill. The Liberal Democrats supported it on Second Reading and we shall support it tonight.
For most people, the test of the health service is primary care. We should allow practitioners to be as innovative as possible and in many ways the Bill does just that.
Like the hon. Member for York (Mr. Bayley), I believe that the Bill could be interpreted in a way that he, I and most people outside the House would not want—that behind a respectable frontage there could be profiteering enterprises in the health service. We must certainly close that loophole.
The Bill is good, but for those who work in the health service the test will be in the resources that are made available to implement its provisions. Although my hon. Friend and I welcome the Government's commitment—if they are re-elected, which seems unlikely—to provide the health service with inflation-linked additional resources every year, that will not keep pace with basic demands, let alone catch up with past requirements.
As I have said before, the Labour party's best intentions will come to nothing—if a Labour Government are elected—unless it commits significantly greater resources to the health service. Labour is now well and truly in third place in terms of promising resources for the health service. That should be an embarrassment to Labour Members as it is to many of their supporters. We are happy to go into the election on the basis of supporting primary care and the health service, but unlike the other parties, we put our money where our mouth is.

Mr. Malone: It gives me great pleasure to commend this important Bill to the House. I thank the hon. Member for Dulwich (Ms Jowell) for her concern. I have never felt alone during our proceedings, although on occasions I have felt, to use the parlance of the Bill, like a single-handed practitioner. However, they now practise in different—usually high-quality—circumstances in a way that would not have been thought of before.
I thank hon. Members from all parties who have supported what will be an important milestone in primary care in this country. This is the first time that the House has addressed itself in detail to legislation on primary care since the inception of the health service 50 years ago.
The Bill is rooted not so much in Government policy as in NHS practice. It follows a comprehensive listening exercise based on ideas brought to us by the professions on how they could come together to provide better primary care. It addresses many problems of the quality of primary care and the uneven distribution of primary care and dental services in parts of the country.
As the hon. Member for Southwark and Bermondsey (Mr. Hughes) has pointed out, new schemes without additional funding are meaningless. The Government are committed, after being re-elected in the coming election, to developing the legislation and the pilot proposals with additional funding. In the Prime Minister's words, that funding is committed year on year on year on year on year throughout the life of the next Government, which will develop the legislation practically, improving primary care for the whole country. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Mr. Deputy Speaker (Mr. Michael Morris): Under Standing Orders, items 9 to 13 on the Order Paper will be dealt with at 10 o'clock. We shall now deal with motions 14 to 18 before a suspension until 10 o'clock.

DELEGATED LEGISLATION

Mr. Deputy Speaker: With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

ROAD TRAFFIC

That the draft Courses for Drink-Drive Offenders (Experimental Period) Order 1997, which was laid before this House on 13th February, be approved.

NORTHERN IRELAND

That the draft Property (Northern Ireland) Order 1997, which was laid before this House on 24th February, be approved.

LOCAL GOVERNMENT FINANCE

That the Special Grant Report (No. 26) (HC 326), which was laid before this House on 27th February, be approved.—[Mr. McLoughlin.]

Question agreed to.

DEREGULATION

Mr. Deputy Speaker: With permission, I shall put together the questions on the deregulation orders.

Motion made, and Question put forthwith, pursuant to Standing Order No. 14A(1) (Consideration of draft deregulation orders),

SCHOOL ACTION PLANS

That the draft Deregulation (Provision of School Action Plans) Order 1997, which was laid before this House on 17th February 1997, be approved.

OCCASIONAL PERMISSIONS

That the draft Deregulation (Occasional Permissions) Order 1997, which was laid before this House on 24th February 1997, be approved.—[Mr. McLoughlin.]

Question agreed to.

Sitting suspended.

10 pm

On resuming—

It being Ten o'clock, MR. DEPUTY SPEAKER put the Questions required to be put by Standing Order No. 53 (Questions on voting of estimates etc.).

Orders of the Day — ESTIMATES, 1997–98 (NAVY) VOTE A

Resolved,
That during the year ending on 31st March 1998 a number not exceeding 51,440 all ranks be maintained for Naval Service, and a number not exceeding 17,195 for Service in the Reserve Naval and Marine Forces.

Orders of the Day — ESTIMATES, 1997–98 (ARMY) VOTE A

Resolved,
That during the year ending on 31st March 1998 a number not exceeding 129,950 all ranks be maintained for Army Service, a number not exceeding 112,579 for Service in the Reserve Land Forces, and a number not exceeding 6,000 for Service as Special Members of the Reserve Land Forces under Part V of the Reserve Forces Act 1996.

Orders of the Day — ESTIMATES, 1997–98 (AIR) VOTE A

Resolved,
That during the year ending on 31st March 1998 a number not exceeding 59,100 all ranks be maintained for the Air Force Service, a number not exceeding 23,000 for Service in the Air Reserve Forces, and a number not exceeding 105 for Service as Special Members of the Reserve Air Forces under Part V of the Reserve Forces Act 1996.

Orders of the Day — ESTIMATES, EXCESSES, 1995–96

Resolved,
That a sum not exceeding £215,096,760.90 be granted to Her Majesty out of the Consolidated Fund to make good excesses of certain grants for Defence and Civil Services for the year ended on 31st March 1996, as set out in House of Commons Paper No. 239.

Orders of the Day — SUPPLEMENTARY ESTIMATES, 1996–97

Resolved,
That a further supplementary sum not exceeding £1,554,472,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 1997, as set out in House of Commons Papers Nos. 238 and 334.

Ordered,
That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. William Waldegrave, Mr. Phillip Oppenheim, Mrs. Angela Knight and Mr. Michael Jack do prepare and bring it in.

CONSOLIDATED FUND (No. 2) BILL

Mr. Michael Jack accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31st March 1996 and 1997: And the same was read the First time; and ordered to be read a Second time this day, and to be printed [Bill 130].

CONSOLIDATED FUND (No. 2) BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith, pursuant to Order [6 March] and Standing Order No. 54 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — PETITIONS

Child Protection

Mr. Simon Hughes: I have two petitions to present, both of which are on the same subject and relate to a Bill that is to come before the other place on Friday. The first is
The Humble Petition of the Conference of Religions of England and Wales with Action for Children campaign and other Citizens of the United Kingdom.
The second is
The Humble Petition of Citizens of the United Kingdom residing in Switzerland and elsewhere.
The petitions
affirm our commitment to the principles of the United Nations Convention on the Rights of the Child which seeks to protect children from sexual exploitation;
and call upon Her Majesty's Government to seek to play an active role in bringing about concerted international action to tackle this problem and in particular to examine ways of ensuring that individuals involved in such exploitation are brought to justice within the United Kingdom;
wherefore, your petitioners pray that your honourable House do introduce legislation to ensure that citizens of the United Kingdom who commit serious sexual offences against children abroad can be prosecuted in this country.

The petitioners wanted the petition to be presented before the debate in the other place on Friday.

To lie upon the Table.

Mr. Mark Wolfson: This petition is on the same subject as the previous two. I have the honour to present it on behalf of my constituent, Mrs. Lois Hainsworth, chairman of the Bahai national women's committee and of Rev. Graham St. John-Willey, director of the Action for Children Campaign, and Mrs. Sandra Khambatta, its assistant director, the other officers of those organisations and the Bahai community in the United Kingdom. This is this first of four similar volumes that hold, in all, 10,000 signatures.

The petition states:
The Humble Petition of Members of the National Spiritual Assembly of the Baha'is of the United Kingdom with Action for Children Campaign and other Citizens or Residents of the United Kingdom,
sheweth
That we, the undersigned, hereby:
express our deep concern at continuing reports that citizens of developed nations travelling abroad may be encouraging the use of children in prostitution and pornography;
affirm our commitment to the principles of the United Nations Convention on the Rights of the Child which seeks to protect children from sexual exploitation; and
call upon Her Majesty's Government to seek to play an active role in bringing about concerted international action to tackle this problem and in particular to examine ways of ensuring that individuals involved in such exploitation are brought to justice within the United Kingdom.
Wherefore your Petitioners pray that your honourable House do introduce legislation to ensure that citizens of the United Kingdom who commit serious sexual offences against children abroad can be prosecuted in this country.
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Orders of the Day — Lariam

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway.]

Ms Jean Corston: I am grateful for this opportunity to raise a matter of urgent public health concern. One of the most remarkable phenomena of the past 30 years has been the increasing prevalence of foreign travel. People now travel to parts of the world that two generation ago were considered the preserve of the intrepid explorer. Before people travel, whether for holiday or business, they seek professional advice about endemic diseases in their country of destination and the medications or treatment that they should take—prophylaxis—to avoid contracting diseases. That is especially true of malaria.
Unfortunately, a more aggressive strain of malaria has emerged recently in some parts of the world, principally sub-Saharan Africa and parts of the far east. The previous prophylactics, chloroquine and paludrine were considered not to be effective enough. Another drug entered the market: mefloquine, which was marketed by Hoffman La Roche under the name Lariam.
I know someone in Bristol who took Lariam 10 months ago to travel to east Africa to finish some academic research. He was a highly competent professional and a married man with children. He was a young person with a great deal to give to the academic world. Just a few days after arriving in Nairobi, he collapsed in the street with total amnesia and was taken to hospital. He has since suffered psychotic attacks, and has had paranoid delusions and terror attacks. He cannot concentrate or work, and he cannot drive a car. His family life has been severely disrupted and he feels at the moment—at best—as though his life was on hold.
I have since discovered that he was not the only one. When he was in hospital in east Africa, he was told by a tropical diseases consultant that severe neuro-psychiatric side effects from Lariam were quite common. The consultant said that he saw hundreds of patients, and that the problem was that the symptoms could be diagnosed as a breakdown.
Following a BBC television programme last week in the west country, someone wrote to me to say that he had been a resident in east Africa, and now travelled there. When he was last in east Africa, he said, he
consulted a doctor in the Nairobi hospital who is considered to be the leading expert on Malaria in Africa and he told me that NO doctor in East Africa will recommend Lariam as they all consider it highly dangerous. I told him my doctor had recommended it and his reply was that UK doctors do not know what they are talking about. I am in the medical business and in frequent contact with doctors and I have not yet found a single doctor in Africa who will recommend Lariam.
As long ago as 1989, the World Health Organisation reported that mefloquine can cause severe mental disturbances, and that the reported side effects were a "cause for concern". Nothing to this effect was put in the product data sheet until 19 March 1996. Hoffman La Roche put out a press release on 16 March 1996 in which it blamed background depression as the cause of Lariam reaction. But the facts of acute neuro-psychiatric reactions in people with no previous history have been highlighted worldwide in many leading medical journals.

The person I know certainly has no previous neuro-psychiatric history, and was an extremely fit young man.
I have since heard many instances of Lariam poisoning. An Officer of the House approached me last summer when I was tabling parliamentary questions on the matter to say that he knew a highly competent professional woman who had taken Lariam, who, he told me, was now psychotic. I have spoken to GPs who are very concerned. I met members of the Lariam support group, which is principally based in the west country but whose members come from all over the UK. I met a highly motivated young woman police officer, who has not been able to work for nearly a year and a half because of the serious side effects.
Lariam was made the drug of first choice in 1995 for sub-Saharan Africa and parts of Asia by the malaria advisory committee, which is headed by Professor David Bradley. It is also recommended as the first choice in MIMs, which gets its information from the malaria research laboratory of the Hospital for Tropical Diseases in London. The medical advisory service for travellers abroad also suggests Lariam as the first choice. British Airways travel clinic also recommends it on the basis of advice from MASTA.
On 7 October 1991, a change was made to the product data sheet with regard to the ability to drive. The recommendation was that such a task should be avoided for three weeks following therapy, because the patient may experience dizziness, a disturbed sense of balance or a neuro-psychiatric reaction. I do not know whether this is observed, and whether people who take that drug cease to drive a car for three weeks afterwards. I do not how people who go on fly-drive holidays manage.
It is interesting to ask what advice is given to travellers on the side effects. For example, somebody from the BA travel clinic said on the "Close Up West" television programme on the BBC:
There are some possible side effects that have been experienced by some people.
But surely people want to know how likely these are, how serious the effects might be, and how much testing has been done. On the BBC "Watchdog" programme, Dr. Peter Barrett—the MASTA director—said
I have to say that personally I think I would probably tend to go for doxycycline in many of the areas where mefloquine might be used…I do find it difficult sometimes advising the use of mefloquine quite as widely.
Many experts also argue that Lariam may not be suitable for two to three-week holidays.
I asked a series of parliamentary questions last June, and was told by the Department of Health that revised guidelines were still being developed by the malaria advisory committee and that no publication date had been set. I assumed that the MAC was a statutory body, but it turns out to be a self-selecting volunteer group of about 40 experts, which has met eight times since 1980. I asked again in early February when the committee would report, and was told by the Minister for Health that the consultation process was "taking longer than anticipated".
A leading figure in travel health in this country who is a member of the committee has told me that she is very impatient for the new guidelines to be published, so that she can advise practice nurses, who are often the people who talk to the traveller, and that she is keen to ensure


that prophylactic drugs are taken far enough in advance so that any side effects can be ascertained. However, on BBC television on 6 March, Dr. David Bradley, the chair of the MAC, said:
I have no idea when we will reach a consensus or whether we will reach one at all.
It is safe to assume that there is a dispute about Lariam among acknowledged experts. The MAC held an emergency meeting on 25 March 1996, and it is right to ask whether that was because of increasing concern about neuro-psychiatric disorders. If that was when the committee last met, and if there has been no agreement nearly a year later, is the committee ever going to agree, and should not some other avenue be pursued?
It is important to ask what advice GPs give and what they say about Lariam. Dr. David Chisholm of the British Medical Association GPs committee, when asked whether he would take Lariam, said on BBC television:
I would be reluctant to, because of the information that is reported to me and to all doctors about its safety profile and its side effects. Some of these side effects are serious and extremely unpleasant.
It must be admitted that there are disputes about the prevalence of side effects. Hoffman-La Roche has always claimed that the rate of serious side effects, defined by the company and by the WHO as leading to death, prolonged hospitalisation or significant disability, as one in 10,000. Dr. Gordon Cook, an expert on malaria at the Hospital for Tropical Diseases, has described that as "sheer nonsense".
When doctors working at MASTA found that the number of their clients suffering from side effects seemed to belie the one in 10,000 assertion, they conducted their own trial, and found that one in 140 were so affected by Lariam as to make them temporarily unable to carry out day-to-day activities. Hoffmann-La Roche disputes those findings. Dr. Gordon Cook says that the MASTA figure is nearer the truth, but that
personal experience leads me to conclude that the true prevalence is more than that".
It would appear that wrangling over the definition of "serious" side effects may be another factor in the delay of the new guidelines that are awaited by travellers and all in the medical profession. My friend in Bristol would not be considered as suffering from serious effects according to the manufacturer, yet nearly a year later he cannot resume work.
A reply to a parliamentary question I tabled in July 1996 to the Secretary of State for Defence revealed that Lariam is not prescribed to service pilots and air crew, because of the possible side effects of dizziness or a distorted sense of balance. Furthermore, the Civil Aviation Authority has also stated that Lariam's
significant side-effect profile makes its use in aircrew inappropriate.
Surely that would lead a traveller on an aeroplane to ask, "If the pilot can't take it because it isn't safe, why should I be taking it? What is the pilot taking if he routinely flies to these areas, has stopovers and has not keeled over from malaria?"
As long ago as April 1992, the WHO removed mefloquine from the recommended anti-malarial drugs list for duty troops visiting high-risk malaria areas, on the basis of its concern about neuro-psychiatric side effects. What about people such as train drivers or brain surgeons, who have jobs in which they cannot afford to suffer

dizziness, which require them to be in full command of their faculties? Those people go on holiday and take anti-malarial drugs, and the potential consequences are too awful to contemplate.
I am also concerned about the effects on children. Changes made to the precautions on the product data sheet in June 1993 included:
a statement indicating that use in children below 15 kg is not recommended.
However, a six-year-old girl died last year after suffering a severe reaction to Lariam, which she had been prescribed for a holiday in Nigeria. She developed a condition known as toxic epidermal necrolysis, which causes skin blisters and mucus in the eyes and nose. Her nails and hair fell out, and she died in intensive care.
Dr. Gordon Cook has said that Lariam appeared to cause an especially adverse reaction in young women. I do not know to what degree Lariam has been tested on young women, or any women. They are certainly given the same dosage as men, never mind the difference in their weight ratio, and I gather that the drug was trialled on Thai soldiers.
The statutory body that assesses data and gives product licences in the United Kingdom is the Medicines Control Agency. It also monitors and evaluates reports of suspected adverse reactions. It is worth drawing an analogy with something that was called to my attention when I served on the Select Committee on Agriculture, when we found that the veterinary medicines directorate gave product licences to organophosphate dips, and it had to monitor the suspect adverse reaction. That is asking people who guarantee the safety of a product to seek evidence that they are wrong. The Agriculture Select Committee recommended that those two functions should be separated because of potential conflicts of interest; a similar recommendation should probably be made in this case.
All the information that I have sought to date from the Department of Health regarding the number and nature of trials that have been done on Lariam before and since licensing has been refused, on the basis of section 118 of the Medicines Act 1968, on the restriction on disclosure of information. That section lays down that information supplied to the licensing authority in connection with the application for, and granting and maintenance of, a product licence or clinical trial certificate must be kept in confidence by the licensing authority and its advisory bodies.
However, a book published by the MCA in 1993 called "Towards Safe Medicines" says that section 118 is intended to protect the commercial secrets of the pharmaceutical industry. It says:
But where there is a safety issue the necessary information is given because the need to protect public health takes priority. Interpretation of this section is kept under review in the light of developments in the EC Single Market to enable more information about the licensing process to be made public.
An Internet trawl reveals adverse reactions and side effects reported from throughout the world.
There were three malaria deaths in the United Kingdom in 1990, and in the subsequent years there were 11, nine, four, 11, five, and 13 in 1996. The argument for retaining Lariam is based on the premise that the risk of not taking the drug are higher than those of suffering the side effects. There is anxiety that the MAC report may be being held


up because of the concern that malaria deaths might increase in time if people do not take Lariam, but effectiveness must be balanced with compliance. If people suffer serious side effects, they will stop taking the prophylactic. Resistance to mefloquine is already being reported in sub-Saharan Africa and the far east.
This matter has the makings of a Government health scandal. The Government are awaiting a report from a non-statutory body, which has no obligation to report, and whose chair has cast doubt on whether it will do so. The Department of Health appears to be doing nothing while purporting to wait for others to act. The Medicines Control Agency appears to be sitting on its hands because it and the Department are responsible for a failure, first to organise and prioritise the conclusions to be drawn from research and monitoring, and secondly to ensure that those priorities and conclusions are unambiguously conveyed to the public via the organisations that I have mentioned.
The system does not appear to be working. Meanwhile, there is utter confusion and much misgiving over what advice to give travellers. There are arcane disputes over the severity of side effects. The manufacturers are involved in personal injury litigation. There are 1,000 litigants UK-wide; anyone who has practised law knows that personal injury litigation is a waiting game, and that is obviously unacceptable.
I congratulate the Lariam Support Group, some of whose members are in the Strangers' Gallery tonight. They are people who—

Mr. Deputy Speaker (Mr. Michael Morris): Order. There is no one in the Gallery that the hon. Member and I are aware of.

Ms Corston: I apologise to you, Mr. Deputy Speaker. I am grateful to you for drawing that to my attention. It may be that people who have an interest in that matter will be listening intently to the debate.
These people have suffered terrible side effects and ill health after taking that drug, which they took in all good faith and on the basis of advice, sometimes for a very long time. Many of them are young, high-achieving people, who feel that their lives have been destroyed. They have suffered denial and, at times, disbelief. They have suffered the isolation of serious illness. They have been very brave in overcoming such adversity, and have joined to fight one of the giants of the pharmaceutical world.
It should not be left to them. I hope that the Minister's response tonight will give me confidence that some proper advice will be provided to people who must recommend prophylaxis for malaria, and that urgent steps will be taken to discover what it is about mefloquine that causes terrible side effects in so many people.

The Parliamentary Under-Secretary of State for Health (Mr. John Horam): I congratulate the hon. Member for Bristol, East (Ms Corston) on raising this matter, because it enables us to discuss two very important public health issues: the prevention of malaria and the safe use of medicines. Lariam—which is otherwise known by its approved name, mefloquine—is one of several medicines used in the prevention and treatment of malaria.

It has an important place in medicine, although, as the hon. Lady has made clear, its use may lead to adverse reactions.
The starting point for this debate should be a recognition that malaria is a serious disease that can lead to death. It is a major cause of ill health and death in many parts of the tropics and sub-tropics, and effective prevention of malaria is a concern to anyone who travels to areas where it is endemic. Malaria is a parasitic disease, which is transmitted by the bite of an infected mosquito. Of the four types of human malaria, falciparum malaria is the most serious.
The symptoms of malaria may include fever, chills, sweats, coughs, diarrhoea, respiratory distress and delirium. However, these can be very varied, and malaria can easily go unrecognised and be misdiagnosed. Falciparum malaria leads to bleeding disorders and failure of various organs. It may also involve the brain, leading to coma and death. Prompt treatment of malaria is essential, even in mild cases, since irreversible complications may develop rapidly.
In the United Kingdom, malaria is an imported disease. About 2,000 cases a year are reported to the public health laboratory service malaria reference laboratory, and, as the hon. Lady said, between four and 12 people a year have died of it in recent years. An increasing proportion of cases is due to the more severe falciparum malaria, which currently accounts for about 60 per cent. of the total.
The Government have long recommended that all travellers to malarious areas take appropriate measures to protect themselves against malaria. Travellers to the tropics and sub-tropics should consult a doctor before travelling. We issue recommendations on malaria and its prevention, both to the general public and to doctors.
Advice for the public is contained in the free booklet, "Health Advice for Travellers" and in a new leaflet on malaria, both produced by the Department of Health. That advice is kept up to date, and is also available on Prestel and Ceefax. The United Kingdom Health Department's book "Health Information For Overseas Travel", which every general practitioner receives, contains more detailed information for doctors. Additionally, the malaria reference laboratory has pre-recorded information on malaria prophylaxis for travellers. and provides advice on specific problems to healthcare professionals.
Prevention of malaria in travellers consists of four components: first, awareness of the risk in the area visited; secondly, preventing mosquito bites by the use of insect repellants, protective clothing after dark and sleeping under bed nets; thirdly, taking an appropriate medicine regularly throughout the stay and for four weeks after returning; and, finally, remembering that malaria can still occur despite all these precautions, and seeing a doctor urgently in the event of fever or flu-like symptoms for up to a year after returning.
As the hon. Lady said, there are several medicines available that protect against malaria, and a range of alternatives is needed, because the disease varies from one part of the world to another. This depends on the type of malaria that is predominant, and on whether local malaria parasites are resistant to particular medicines—a problem that has increased in recent years. In many countries, falciparum malaria is now resistant to chloroquine, which has been the mainstay of malaria prevention for many years.
Advice on the prevention and treatment of malaria has been provided by an ad hoc committee convened by the malaria reference laboratory. The committee's guidelines, which are aimed at health professionals, were last published in the British Medical Journal in 1995, where they are available to all those interested in the subject. Its report includes advice on the use of mefloquine.
The committee is presently producing a new set of guidelines. When consultation has been completed, its advice will be published and the Government will review the implications fully. I heard clearly the hon. Lady's impatience with the procedure. I take her comments seriously, and I shall determine when the committee intends to conduct a further review or publish work on the subject.
Once licensed, the Government closely monitor the use and adverse effects of medicines to ensure that experience from widespread use is appropriately acted upon. This work, which is called pharmacovigilance, is a top priority for the Medicines Control Agency, and an area where the UK is a recognised world leader. Our record in identifying unexpected drug safety hazards, investigating them thoroughly and taking effective and prompt action is second to none.
The yellow card scheme encourages doctors to submit reports of adverse effects to medicines to the MCA through one of the best supported reporting schemes in the world, underpinned by a purpose-designed, state-of-the-art computer system. This scheme enables us to identify important hazards as early as possible.
The Government also use a range of other methods to assess adverse drug reactions, so that effective preventive measures may be put in place. The UK has taken a lead by developing the methodology of, and guidelines for, formal post-marketing surveillance studies, and by using databases such as the general practice research database for the investigation of possible drug safety hazards.
Mefloquine is an anti-malarial drug derived from quinine, which was first authorised in the UK in 1989. It has a high level of effectiveness—between 90 and 100 per cent.—in both preventing and treating malaria. Mefloquine is an important anti-malarial drug because it is useful in areas where the parasite is resistant to other drugs, notably chloroquine.
As with any medicine, the safety of mefloquine depends on appropriate use, but adverse effects may occur even when it is used as recommended. The authorised product information for mefloquine describes the recommended uses, provides dosage schedules, indicates who should not use it, and sets out the precautions necessary for safer use, and lists the recognised adverse reactions. This is available to both doctors and patients, in the latter case supplied with the medicine in lay language. Perhaps it is not plain English, but it is understandable lay language.
The most important adverse reactions to mefloquine are those affecting the nervous system—the so-called neuro-psychiatric reactions. The most common are depression, headache, anxiety and panic reactions. When relatively mild, these reactions are distressing to the user and his or her companions, and may curtail their trip abroad. Fortunately, most such reactions are mild and short-lived, and do not lead to serious consequences or a need for hospitalisation. Rarely, neuro-psychiatric

reactions are serious or more prolonged, and no one is underestimating the consequences of such reactions for the individuals concerned.
We must see the problem in its proper context. First, travellers to tropical and sub-tropical regions face an important risk of malaria, which is an illness with significant morbidity and mortality. Secondly, used correctly, mefloquine is highly effective in preventing malaria, and where there is resistance to chloroquine, it is the best treatment available. Finally, alternative anti-malarials are also associated with adverse effects, and these may also be serious on rare occasions. Overall, the balance of risks and benefits for mefloquine is favourable, and similar to alternative treatments.
Adverse reactions to mefloquine have received considerable publicity in the media, and it is right that the public should be aware that medicines may have important side effects. It is unfortunate, however, if the messages provided are not well balanced, as this may unjustifiably scare the public and lead them to take inappropriate action, such as stopping medication needed to prevent malaria. For travellers to endemic areas who do not use preventive medicines, the risks and consequences of contracting malaria are much greater than the risks of serious adverse reactions occurring with mefloquine.
The hon. Lady mentioned the number of adverse reactions. About 1,200 people are reporting possible adverse reactions in any one year. It is probable that 700,000 have taken the drug. The MCA and the committee on the safety of medicines have carefully monitored the safety of mefloquine since it was authorised in 1989. In the light of accumulating experience, product information has been amended on no fewer than five separate occasions to make 16 significant changes to the recommendations on its use and safety. That should ensure that doctors and patients are fully aware of the adverse effects of mefloquine, and know that appropriate action can be taken to minimise them.
An important further change is currently being made to recommend that people start a course of mefloquine up to two to three weeks before travelling. The effect will be that most patients who do not tolerate it will be aware of the problem before they travel, and will not experience difficulties in unfamiliar surroundings.
We have also provided doctors and pharmacists with information and guidance about neuro-psychiatric adverse reactions, in an article published in the bulletin "Current Problems in Pharmacovigilance" in July 1996. That followed a review initiated by the Committee on Safety of Medicines. Safety monitoring is a continuous process, and, as with any medicine, further action will be taken as and when new evidence becomes available that has an impact on the risks and benefits of the drug.
I assure the hon. Lady that I was impressed by what she said. I take it seriously, and I will monitor the situation in the light of it.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes to Eleven o'clock.